ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (the "Agreement") dated as of September
12, 1996, is made and entered into by and between Xxxxxxxxx Dental Company,
a Minnesota corporation having its principal offices at 0000 Xxxxxxx Xxxxxxx
Xxxx, Xx. Xxxx, Xxxxxxxxx 00000 ("Buyer"), and Deluxe Corporation, a Minnesota
corporation having its principal offices at 0000 Xxxxxxxx Xxxxxx Xxxxx, Xx.
Xxxx, Xxxxxxxxx 00000-0000 ("Seller").
WHEREAS, Seller, through Xxxxxxx, one of its operating divisions
("Xxxxxxx"), is engaged in the production and marketing of stationery and office
supply products to health care professionals; and
WHEREAS, Seller desires to sell and assign to Buyer, and Buyer desires to
purchase and assume from Seller, on the terms and subject to the conditions set
forth in this Agreement, the assets and certain liabilities of Seller to the
extent such assets and liabilities are recorded on Seller's books and records as
assets or liabilities relating to Xxxxxxx.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements and the conditions set forth in this Agreement, Buyer
and Seller hereby agree as follows:
ARTICLE I
TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
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1.01 Transfer of Assets. On the terms and subject to the conditions set
forth in this Agreement, and in reliance on the representations and warranties
contained herein, Seller shall, at the "Closing" (as hereinafter defined), sell,
transfer and assign to Buyer, and Buyer shall purchase and acquire from Seller,
all of Seller's right, title and interest, as of the "Closing Date" (as
hereinafter defined), in and to all of the following assets of the Seller used
in connection with the business of Xxxxxxx, including assets recorded on the
Seller's books and records as assets of Xxxxxxx (collectively, except for the
excluded assets set forth in Section 1.02 hereof, the "Assets"):
(a) All manufacturing, production, maintenance, packaging, testing and
other machinery, equipment (including all computer equipment and related
peripherals), tools, dies, molds, furniture, fixtures, office equipment and
supplies and other tangible personal property (together with all spare and
maintenance parts), including all interests in operating software, application
software, development and debugging tools, development environments and quality
assurance equipment and testing suites, including without limitation, those
items listed on Schedule A hereto (except for
those items listed on Schedule A that have been sold in the ordinary course of
Xxxxxxx'x business);
(b) All inventory (whether located on the premises owned or leased by
Seller, in transit to or from such premises, in other storage or warehouse
facilities or otherwise), raw materials, raw data, processed data, components,
work-in-progress, finished goods, packaging materials and supplies, including
without limitation, those items listed on Schedule B hereto (except for those
items listed on Schedule B that have been sold in the ordinary course of
Xxxxxxx'x business);
(c) All claims and rights under all agreements, contracts, contract rights,
sales invoices, licenses, purchase and sale orders, quotations, and other
executory commitments, including without limitation, the items listed on
Schedule C hereto;
(d) All rights and incidents of interest in and to all personal property
leases, including without limitation, those personal property leases listed on
Schedule D hereto, and all real property listed on Schedule E hereto, and all of
Seller's interest in all of the structures, fixtures and improvements listed on
Schedule E hereto;
(e) All franchises, licenses, permits, consents, authorizations,
certificates and approvals of any federal, state or local regulatory,
administration or other governmental agency or body issued to or held by Seller,
which are necessary, related or incidental to the business of Xxxxxxx including
without limitation those listed on Schedule G hereto;
(f) All inventions, trade secrets, formulae, process engineering, technical
data, art works, schematic drawings, secret processes, engineering drawings,
proprietary rights, proprietary knowledge, proprietary processes, know-how,
computer software and programming know-how (including source code, object code,
on-line files, documentation, testing materials, reports, etc.), product plans,
product designs, information on product costs, product prices, product names,
finances, business opportunities, research and development, software development
tools, marks, trademarks, names (including without limitation the marks,
trademarks and names described in Section 1.01(p)), symbols, service marks,
trade names, logos, slogans, copyrights, patents and other industrial and
intellectual property rights and all applications therefor, registrations
thereof and licenses in respect thereof necessary to or used in the design, use,
distribution, manufacture, sale, leasing, installation, servicing or maintaining
of Xxxxxxx'x products or otherwise used in the conduct of its business,
including all software and databases including without limitation the software
listed on Schedule 4.14 and hardware listed on Schedule A.
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(g) All originals or complete copies of all financial records and customer
and supplier lists and files, including addresses, drawings, files, sales
literature, sales order log books, customer files, papers, personnel files,
"bug" or error documentation and all other books and records related to
Xxxxxxx'x business;
(h) All rights, if any, under express or implied warranties from suppliers
and vendors which are transferable without the payment of any transfer fee:
(i) All causes of action, judgments and claims or demands of whatever kind
or description against third parties related to Xxxxxxx;
(j) All goodwill associated with Xxxxxxx'x business;
(k) [Omitted];
(l) All proprietary information and inventions agreements, or any agreement
similar in nature thereto, with all past and present employees of, consultants
to or contractors for Xxxxxxx;
(m) All marketing plans and materials, training materials, office,
technical and reference manuals and guides, developer's notes and similar items;
(n) [Omitted];
(o) All other assets, properties, interest in properties and rights owned
by the Seller that are (i) reflected in the "Balance Sheet" (as hereinafter
defined) (or not so reflected as a result of being fully amortized, depreciated
or expensed as of the "Balance Sheet Date" (as hereinafter defined)) or in the
"Financial Records"; and (ii) acquired after the Balance Sheet Date;
(p) The name and trademark "Xxxxxxx" or any combination of words in which
such name appears or any rights associated with such name or any right to use
such name in all jurisdictions in which Xxxxxxx either currently uses any such
name or has any right to use any such name;
(q) All accounts receivable arising out of the sale of Xxxxxxx'x inventory
or the performance of services by Xxxxxxx prior to the Closing Date;
(r) All rights in and to any motor vehicles owned or leased by Xxxxxxx; and
(s) Any prepaid expenses related to Xxxxxxx'x business.
1.02 Excluded Assets. Notwithstanding the terms of Section 1.01, the
following assets shall be retained by Seller and shall not be sold, transferred
or assigned to Buyer:
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(a) All bank accounts of Xxxxxxx, including all cash on deposit in such
accounts as of the Closing Date;
(b) All former corporate certificates of authority, corporate minute books
and corporate stock records or registers of Xxxxxxx;
(c) Any right to use the name or xxxx "Deluxe;"
(d) All equipment located at the Seller's regional lithography centers that
is used to print skeleton forms on Xxxxxxx stationery;
(e) All desks, chairs, filing cabinets and partitions and the color copier
located at the Seller's Shoreview, Minnesota office that are used by Xxxxxxx
employees who perform accounting, accounts receivable, accounts payable,
payroll, credit and general ledger or advertising duties;
(f) All artwork, including monograms and cuts, utilized by Seller's check
and forms divisions; and
(g) All software used by Xxxxxxx employees which has no application to the
operations of Xxxxxxx other than in connection with interactions between Xxxxxxx
and other divisions of Seller.
1.03 Assumption of Liabilities. Buyer shall assume, pay, perform in
accordance with their terms or otherwise satisfy as of and after the Closing
Date: (a) Seller's liabilities under the Contracts listed on Schedule C; (b)
Seller's obligations under the personal property leases listed on Schedule D;
and (c) $1,500,000 less the Accrued Vacation Adjustment of the following
liabilities: (i) accrued profit sharing for those persons who are employed by
Xxxxxxx immediately preceding the Closing Date and who are hired by the Buyer
(the "Hired Employees"); (ii) accrued real estate taxes; and (iii) Xxxxxxx'x
accounts payable, as selected by Buyer from the accounts payable report showing
Xxxxxxx'x accounts payable by payee, amount and due date as of the Closing Date
(the "A/P Report"), which shall be provided by the Seller at the Closing (the
selected accounts payable are referred to herein as the "Assumed Liabilities").
Buyer and Seller shall execute a certificate at the Closing which identifies
each of the Assumed Liabilities (the "Assumption Certificate"). The Accrued
Vacation Adjustment shall be equal to one-half of the cash amount paid by Seller
for accrued vacation to Hired Employees.
1.04 Excluded Liabilities. Other than as specifically set forth above in
Section 1.03, Seller shall retain, and Buyer shall not assume, and nothing
contained in this Agreement shall be construed as an assumption by Buyer of, any
liabilities, obligations or undertakings of Seller of any nature whatsoever,
whether absolute, fixed or contingent, known or unknown due or to become due,
unliquidated or otherwise which accrued prior to the Closing Date.
Notwithstanding the execution and delivery of this
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Agreement and the consummation of the transactions contemplated hereby, Seller
shall be responsible for and shall indemnify Buyer against all of the
liabilities, obligations and undertakings of the Seller not assumed by Buyer
pursuant to Section 1.03 hereof.
1.05 License of Certain Property. Seller hereby grants to Buyer a
royalty-free, irrevocable, world-wide, perpetual and nonassignable license in
and to (i) all artwork in existence on or before the Closing Date, including
monograms and cuts, utilized by Seller in connection with the Xxxxxxx business;
and (ii) all intellectual property of Seller related to the Xxxx jet presses,
including without limitation, matters as to automation (servo controlled plate
cylinder, program on and off of all cylinders and feeder, batch and waste
separator), matters as to enhancement (plate lock up, skew adjust feeder, plate
cylinder single position entry and locking mechanism, spray predamper), and
matters as to addition (rotary placer with 4000 envelopes capacity).
Notwithstanding the foregoing, the Buyer may transfer the licenses granted to it
hereunder to any person or entity to whom it transfers all or substantially all
of the assets associated with the Xxxxxxx business as it is conducted by the
Buyer.
ARTICLE II
PURCHASE PRICE
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2.01 Amount. The total purchase price (the "Purchase Price") for the
Assets shall be (a) $60,000,000 (the "Cash Purchase Price"), plus (b) the
assumption by Buyer of the liabilities in Section 1.03 on the Closing Date.
2.02 Manner and Timing of Payment. On the Closing Date, (a) if the Seller
has, by that date, satisfied its obligation under Section 11.03, the Buyer shall
pay to the Seller the Cash Purchase Price, or (b) if the Seller has not, by that
date, satisfied its obligations under Section 11.03, the Buyer shall pay to the
Seller $55,000,000, and the Buyer shall pay the remainder of the Cash Purchase
Price, plus interest thereon at the rate equal to the daily rate of the
Provident Institutional Fund, TempFund, from the Closing Date to the date of
payment of the remainder of the Cash Purchase Price, to Seller immediately upon
the timely completion by the Seller of its obligation under Section 11.03
hereof, time being of the essence. In the event Seller has not satisfied its
obligations under Section 11.03 within the time period therein stated, Buyer
shall have no further obligation to pay the Seller the remainder of the Cash
Purchase Price. All payments to the Seller shall be made by wire transfer to the
Seller's account with First Bank, N.A., Minneapolis, Minnesota (account #1801-
00000000, ABA #000000000) or to Seller's assignee according to such written
instructions as are received by Buyer from Seller prior to the Closing Date.
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2.03 Post-Closing Adjustment. A refund of a portion of the Cash Purchase
Price shall be made in an amount equal to the amount by which the sum of the
book value of the accounts receivable (net of reserve for bad debt), inventory
(net of reserve for obsolescence), and equipment (net of depreciation) (the
"Adjustment Assets") included in the Assets on the Closing Date is less than the
book value of those items shown on the Balance Sheet, as the term "Balance
Sheet" is defined in Section 4.06. In order to determine the book value of the
Adjustment Assets at the Closing Date, the Seller will provide to the Buyer,
within 30 days of the Closing Date, a balance sheet for Xxxxxxx as of the
Closing Date (the "Closing Date Balance Sheet") prepared in accordance with
generally accepted accounting principles applied on a basis consistent with the
Balance Sheet. Within 30 days after delivery of the Closing Date Balance Sheet
to the Buyer, the Buyer will deliver a written notice (the "Buyer's Notice") to
the Seller, stating whether or not the Buyer objects to any of the information
contained in the Closing Date Balance Sheet which would affect the calculation
of the book value of the Adjustment Assets and, if the Buyer so objects, setting
forth the Buyer's objections together with the reasons therefor with reasonable
specificity. In reviewing the Closing Date Balance Sheet the Buyer may be
assisted by such public accounting firm as it may select, and such public
accounting firm shall have reasonable access to the books and records of the
Seller, including without limitation the work papers of the accountants of the
Seller, related to the preparation of the Closing Date Balance Sheet. If no
objections are set forth in the Buyer's Notice or if no Buyer's Notice is
delivered within 30 days after delivery of the Closing Date Balance Sheet to the
Buyer, any objections to the Closing Date Balance Sheet will be deemed to have
been waived. If the Buyer's Notice is timely delivered setting forth objections
to the Closing Date Balance Sheet and such objections are not resolved by the
Buyer and the Seller within 15 days after delivery of the Buyer's Notice to the
Seller, either of these parties may submit all unresolved matters for resolution
as soon as practicable thereafter to KPMG Peat Marwick (the "Accounting Firm");
each party hereby represents to the other that it has not retained the services
of KPMG Peat Marwick within the 24 month period prior to the Closing Date, and
each party covenants to the other that it will not retain or offer the services
of KPMG Peat Marwick until any post-closing adjustment has been finally
resolved. The determinations of the Accounting Firm as to all unresolved matters
shall be final and binding on Buyer and Seller. Each of Buyer and Seller agrees
to permit the other party and such other party's accounting firm and the
Accounting Firm to have reasonable access during normal business hours to its
books and records as they relate to Xxxxxxx, including, without limitation, the
work papers of its accountants, and to have reasonable access to such party's
representatives or its accountants, in connection with the preparation and
review of the Closing Date Balance Sheet. The Seller will bear all costs and
expenses of its auditors in connection with the preparation of the Closing Date
Balance Sheet. The costs and expenses of the Accounting Firm will be borne by
the
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party whose position with respect to the value of the Adjustment Assets, as
first submitted to the Accounting Firm, is at greater variance from the actual
amount of the Adjustment Assets as determined by the Accounting Firm. Within 10
business days of the final determination of the amount of the Adjustment Assets
as described in this Section, the Seller, in the case of a determination that
the Adjustment Assets as of the Closing Date were less than the aggregate book
value of such items as set forth on the Balance Sheet, shall pay to the Buyer an
amount equal to such shortfall, together with interest thereon computed from the
Closing Date at a rate equal to the reference rate of First Bank, N.A., in
immediately available funds. In the event that the final determination of the
Adjustment Assets as of the Closing Date is greater than the book value of the
Adjustment Assets as set forth on the Balance Sheet, the Buyer shall have no
obligation to pay any amount to the Seller.
ARTICLE III
CLOSING
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3.01 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Deluxe Corporation,
0000 Xxxxxxxx Xxxxxx, Xxxxx Xx. Xxxx, Xxxxxxxxx at 10:00 a.m. on the first
business day following the satisfaction of all conditions listed in Article
VIII. The date on which the Closing occurs is referred to herein as the "Closing
Date," and the Closing shall be deemed effective as of 12:01 a.m. on the Closing
Date.
3.02 General Procedure. At the Closing each party shall deliver to the
party entitled to receipt thereof the documents required to be delivered
pursuant to Article VIII hereof and such other documents, instruments and
materials (or complete and accurate copies thereof, where appropriate) as may be
reasonably required in order to effectuate the intent and provisions of this
Agreement and all such documents instruments and materials shall be satisfactory
in form and substance to counsel for the receiving party. The conveyance,
transfer, assignment and delivery of the Assets shall be effected by Seller's
execution and delivery to Buyer of a xxxx of sale substantially in the form
attached hereto as Exhibit A (the "Xxxx of Sale"), an Assignment and Assumption
Agreement with the Assumption Certificate attached thereto, all substantially in
the form of Exhibit B (the "Assignment and Assumption Agreement"), and a
transitional services and operations agreement substantially in the form
attached hereto as Exhibit C (the "Transitional Services and Operations
Agreement") and such other instruments of conveyance, transfer, assignment and
delivery as Buyer shall reasonably request (the Xxxx of Sale, the Assignment and
Assumption Agreement, and the Transitional Services and Operations Agreement and
the Real Estate Purchase Agreement substantially in the form of Exhibit D, and
the instruments of conveyance, transfer, assignment or delivery required to be
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delivered under the Real Estate Purchase agreement, are hereby collectively
referred to as the "Other Agreements").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller hereby represents and warrants to Buyer that:
4.01 Incorporation and Corporate Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Minnesota and in each jurisdiction in which Xxxxxxx is doing business and has
all requisite corporate power and authority and all authorizations, licenses,
permits and certifications necessary to carry on the business as now being
conducted by Xxxxxxx and to own, lease and operate the Assets.
4.02 [Omitted.]
4.03 Execution, Delivery; Valid and Binding Agreement. The execution,
delivery and performance of this Agreement and the Other Agreements by Seller
have been duly and validly authorized by the Board of Directors of Seller, and
no other corporate action or authorization by Seller is necessary to authorize
the consummation of the transactions contemplated by this Agreement or the Other
Agreements. This Agreement has been duly executed and delivered by Seller and
constitutes the valid and binding obligation of Seller, enforceable in
accordance with its terms. As of the Closing, the Other Agreements will be duly
executed and delivered by the Seller and will constitute the valid and binding
obligations of the Seller, enforceable in accordance with their terms.
4.04 Authority; No Breach. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and the Other Agreements and to
perform its obligations hereunder and under the Other Agreements. The execution,
delivery and performance of this Agreement and the Other Agreements by Seller
and the consummation of the transactions contemplated thereby will not (a)
conflict with or result in any breach of any of the provisions of, or constitute
a default under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge, mortgage or
other encumbrance (collectively "Liens"), under the provisions of the Articles
of Incorporation or Bylaws of Seller or any indenture, mortgage, lease, loan
agreement or other agreement or instrument by which Seller or the Assets are
bound or affected, or (b) violate any law, statute, rule or regulation or order,
judgment or decree to which Seller or the Assets are subject or cause the Assets
to become subject, or cause the Buyer to become liable, to pay any tax (other
than sales or use tax, if applicable). No consent, approval or authorization of,
or declaration to or filing with, any governmental or regulatory authority is
required for the valid
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execution and delivery, by the Seller of this Agreement or other Agreements or
any other agreement or instrument to be executed and delivered by the Seller
hereunder or the consummation of the transactions contemplated hereunder or
thereunder.
4.05 [Omitted.]
4.06 Financial Statements. Copies of (a) the unaudited balance sheet, as
of June 30, 1996 (the "Balance Sheet Date") of Xxxxxxx (the "Balance Sheet") and
the unaudited statements of earnings, shareholders' equity and cash flows of its
business for the six-month period ended on the Balance Sheet Date (such
statements and the Balance Sheet being herein referred to as the "Latest
Financial Statements"), and (b) the unaudited balance sheets, as of December 31,
1995 of Xxxxxxx and the unaudited statements of earnings, shareholders' equity
and cash flows of its business for the year then ended (collectively with the
Latest Financial Statements, the "Financial Statements") are shown on Schedule I
hereto. The Financial Statements are: (a) based upon the information pertaining
to Xxxxxxx contained in the Seller's books of account, general ledgers, accounts
payable and receivable, payroll records, tax returns and supporting schedules
and fairly present the financial condition of its business as of the dates
thereof and the results of operations for the periods referred to therein; (b)
prepared in accordance with generally accepted accounting principles, subject to
the exception that the Latest Financial Statements are subject to normal
recurring year-end adjustments the effect of which will not, in the aggregate,
be material, and the absence of notes; and (c) reflect the consistent
application of accounting principles throughout the periods involved.
4.07 Absence of Undisclosed Liabilities. With respect to the Assets or the
operations of its business, Xxxxxxx has no liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due,
whether known or unknown, and regardless of when asserted and regardless of
whether such liabilities would have been required to be disclosed under GAAP)
arising out of transactions or events heretofore entered into, or any action or
inaction, or any state of facts existing, with respect to or based upon
transactions or events heretofore occurring, except (i) as reflected in the
Balance Sheet or (ii) liabilities which have arisen after the Balance Sheet Date
in the ordinary course of business (none of which is an uninsured liability for
breach of contract, breach of warranty, tort, infringement, claim or lawsuit).
4.08 [Omitted.]
4.09 Absence of Certain Developments. Since December 31, 1995 (or June
30, 1996, with respect to subsections (j), (k) or (p) of this Section 4.09), the
Seller has not, with respect to Xxxxxxx:
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(a) borrowed any amount or issued any debt securities or incurred or
become subject to any liability or obligation except (i) normal trade or
business obligations or liabilities incurred in the ordinary course of business
the performance of which will not, individually or in the aggregate, have a
material adverse effect on the financial condition or the results of operations
of Xxxxxxx; and (ii) liabilities or obligations under Contracts entered into in
the ordinary course of business the performance of which will not individually
or in the aggregate have a material adverse effect on the financial condition or
the results of operations of Xxxxxxx;
(b) subjected any of the Assets to any Lien except (i) Liens for taxes not
yet due and payable, (ii) Liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers, warehousemen,
laborers, materialmen and the like or (iii) Liens in respect of pledges or
deposits under workers' compensation laws (the Liens referred to in the
foregoing clauses (i), (ii) and (iii) being hereinafter referred to as
"Permitted Liens");
(c) discharged or satisfied any Lien or paid any liability other than
current liabilities paid in the ordinary course of business;
(d) sold, assigned, licensed or otherwise transferred (including, without
limitation, transfers to any employees, affiliates or shareholders) any tangible
assets of its business or canceled any debts or claims, in each case, except in
the ordinary course of business;
(e) sold, assigned, licensed or otherwise transferred any rights in or to
the Xxxxxxx Technology, except in the ordinary course of business;
(f) disclosed to any person, other than under non-disclosure agreements
identified in Schedule 4.09(f) of the Disclosure Schedule attached hereto, any
proprietary confidential information of its business or otherwise related to the
Assets;
(g) waived any debts owing to it or any other rights of material value or
suffered any extraordinary losses or adverse changes in collection loss
experience, whether or not in the ordinary course of business or consistent with
past practice;
(h) taken any other action or entered into any other transaction other
than in the ordinary course of business and in accordance with past custom and
practice;
(i) suffered any theft, damage, destruction or loss of or to any property
or properties owned or used by it in connection with its business, whether or
not covered by insurance;
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(j) made any change in the compensation arrangement or agreement with any
employee (other than the adoption of retention bonus plan shown on Schedule J)
or made or granted any increase in any employee benefit plan, or amended or
terminated any existing employee benefit plan, or adopted any new employee
benefit plan or made any commitment or incurred any liability to any labor
organization;
(k) terminated the employment of any key employee or received any notice
of any impending resignation by any such person;
(l) made any loans or advances to, or guarantees for the benefit of, any
person;
(m) made any modification, waiver, change, amendment, release, rescission,
accord and satisfaction or termination of, or with respect to, any term,
condition or provision of any Contract, other than in accordance with the terms
thereof or in the usual and ordinary course of business and consistent with
prior practice;
(n) suffered any labor disputes or disturbances including, without
limitations, the filing of any petition or charge of unfair labor practices with
the National Labor Relations Board;
(o) suffered any material adverse change in its business, operations,
properties, assets or condition, or its relationships with its suppliers,
customers or employees;
(p) entered into or modified any compensation agreement or arrangement
with any consultants;
(q) disposed of, abandoned or disclosed any Xxxxxxx Technology; or
(r) entered into any contract, agreement, understanding or other
commitment to do or undertake to do any of the foregoing.
4.10 Title to Properties.
(a) With the exception of the office facilities utilized by 30 Xxxxxxx
employees in Shoreview, Minnesota, the real property described in Schedule E
constitutes all of the real property used or occupied by Xxxxxxx (the "Real
Property"). The Real Property is sufficient for the conduct of business as now
conducted.
(b) Seller owns good and marketable title to the Assets, including each of
the tangible properties and tangible assets reflected on the Balance Sheet or
acquired since the Balance Sheet Date, free and clear of all Liens.
(c) The Schedules set forth a complete and accurate list of all the Assets
(other than items with an original purchase price less than the minimum amount
for capital asset treatment under the
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Seller's or Xxxxxxx System, Inc.'s capitalization accounting policy in effect on
the date of the purchase of the item (the Seller's current minimum amount is
$2,000)), which constitute equipment (including computer equipment and related
peripherals), machinery, motor vehicles, furniture, real property, fixtures and
furnishings. All of the buildings, machinery, equipment and other tangible
assets necessary for the conduct of Xxxxxxx'x Business have been adequately
maintained, and are in good condition and repair, ordinary wear and tear
excepted, and are usable in the ordinary course of business. There are no
defects in such Assets or other conditions relating thereto which, individually
or in the aggregate, materially adversely affect their operation or value.
Seller owns, or leases under valid leases, and is hereby selling or assigning to
Buyer, all machinery, equipment and other tangible Assets necessary for the
conduct of Xxxxxxx'x business.
(d) To the best of Seller's knowledge, Seller is not with respect to
Xxxxxxx, in violation of any applicable zoning ordinance or other law,
regulation or requirement relating to the Real Property, and the Seller has not,
with respect to Xxxxxxx, received any notice of any such violation, or the
existence of any condemnation proceeding with respect to any of the Real
Property, except, in each case, with respect to violations of the potential
consequences of which have not had and could not reasonably be expected to have
a material adverse effect.
4.11 Inventory. Subject to the reserve for inventory obsolescence shown on
the Financial Statements, the Inventory consists of items of a quality and
quantity usable and, with respect to finished goods only, salable at Xxxxxxx'x
normal profit in each case, in the ordinary course of its business. Subject
also to the reserve for inventory obsolescence, the Inventory is not slow-moving
as determined in accordance with past practices, or obsolete. No inventory is
damaged, and all inventory is of merchantable quality. A materially complete
and accurate summary of the Inventory as of June 30, 1996 is shown on Schedule B
hereof.
4.12 [Omitted.]
4.13 Contracts and Commitments.
(a) Except as described in Schedule 4.13 of the Disclosure Schedule, the
Seller is not, with respect to Xxxxxxx, a party to, nor are the Assets bound by
or subject to, any of the following agreements, whether oral or written: (i)
collective bargaining agreements or contracts with any labor union; (ii) bonus,
pension, profit sharing retirement or other forms of deferred compensation
plans; (iii) hospitalization insurance or other welfare benefit plan or
practice, whether formal or informal; (iv) contract for the employment of any
officer individual employee or other person on a full-time or consulting basis
or relating to severance pay for any such person; (v) confidentiality agreement;
(vi) agreement or indenture relating to the borrowing of money or placing a Lien
on
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any of the Assets; (vii) guaranty of any obligation for borrowed money or
otherwise; (viii) lease or agreement under which it is lessee of, or holds or
operates any property, real or personal, owned by any other party; (ix) lease or
agreement under which it is lessor of, or permits any third party to hold or
operate, any property, real or personal; (x) contract or group of related
contracts for the purchase, licensing or sale of products or services (whether
as licensor, licensee, buyer or seller); (xi) contract which prohibits Seller
from freely engaging in business anywhere in the world; (xii) contract for the
distribution of any products (including any distributor, value-added reseller,
sales and original equipment manufacturer contract); (xiii) franchise agreement;
(xiv) license agreement or agreement providing for the payment or receipt of
royalties or other compensation by or to Xxxxxxx; (xv) contract or commitment
for capital expenditures in excess of $50,000; (xvi) agreement for the sale of
any capital asset; or (xvii) other agreement which is not entered into in the
ordinary course of business.
(b) The Seller has performed all obligations required to be performed by
it under all contracts and agreements to which it is a party that relate to the
business of Xxxxxxx. To the knowledge of Seller, no such contract is in default
and no condition or event exists or has occurred which, after notice or lapse of
time or both, would constitute a default thereunder. None of such contracts
contain provisions prohibiting the assignment thereof or providing that they
shall or may be canceled, terminated or accelerated upon an assignment thereof.
The contracts identified in Schedule C are all of the contracts that relate to
Xxxxxxx'x business. There are no renegotiations or requests or demands to
renegotiate any such contracts. All of the contracts identified in Schedule C
are terminable in accordance with their terms. The contracts identified in
Schedule C for which Seller has not provided a written copy to Buyer are
terminable without payment of any termination fees on no more than 30 days'
advance written notice, except for contracts relating to Xxxxxxx'x software
alliance program, which contracts are substantially similar to the software
alliance agreements copies of which have been provided by Seller to Buyer.
4.14 Intellectual Property Rights.
(a) Schedule 4.14 of the Disclosure Schedule describes all of the
intellectual property, including without limitation, software, codes, trade
names, trademarks, copyright registrations and copyrightable material, licensed,
owned or otherwise used by the Seller in the conduct of Xxxxxxx'x business or
necessary to the conduct of Xxxxxxx'x business as now conducted or planned to be
conducted and, in the case of trade names and trademarks, the geographic
territories where the trade names and trademarks have been used (the "Xxxxxxx
Technology"). Seller owns and possesses all right, title and interest, or holds
a valid license, in and to the Xxxxxxx Technology. Except for the SAS System
for Windows and
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the font software from Bloc, all of Seller's rights in and to the Xxxxxxx
Technology is transferrable and assignable to Buyer without payment of any
transfer or license fees. Schedule 4.14 of the Disclosure Schedule also
describes all rights in the Xxxxxxx Technology in favor of third parties,
whether arising by license or otherwise. Seller has taken all necessary action
to protect its rights in the Xxxxxxx Technology. No current or former
consultant, contractor or developer employed or retained by Seller has any
rights or interest in the Xxxxxxx Technology. Seller has not received any
notice of, nor are there any facts known to Seller which indicate that any third
party is infringing or misappropriating any of the Xxxxxxx Technology.
(b) To the best of Seller's knowledge, neither the Xxxxxxx Technology nor
any processes, method or operation employed by the Seller in Xxxxxxx'x business,
now or in the past, infringes upon any proprietary rights or intellectual
property of any third party. There is not pending or to the best of Seller's
knowledge, threatened, any claim against Seller contesting the right of Seller
to use the Xxxxxxx Technology or engage in or employ any Xxxxxxx Technology in
any fashion, there are no pending legal actions challenging the Seller's
ownership of the Xxxxxxx Technology and there are no legal actions pending or,
to the best of Seller's knowledge, threatened, with respect to the Xxxxxxx
Technology, including without limitation "look and feel" contentions or other
intellectual property claims. Except as set forth on Schedule 4.14 the Seller
has not within the two year period prior to the Closing Date received any notice
of infringement, misappropriation or conflict from any person or entity with
respect to the Xxxxxxx Technology.
4.15 Litigation. Except as described in Schedule 4.15, there are no
actions, suits, proceedings, orders or investigations pending or, to the best
knowledge of Seller, threatened against Seller which would affect Xxxxxxx, or
brought by Seller on behalf of Xxxxxxx against others, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, and
there is no reasonable basis known to Seller for any of the foregoing. Seller
has not received any opinion or legal advice to the effect that it is exposed
from a legal standpoint to any liability or disadvantage that has had or could
reasonably be expected to have a material adverse effect on Xxxxxxx.
4.16 Warranties. There are no claims outstanding, pending or, to the best
knowledge of Seller, threatened for breach of any warranty, maintenance or
support obligations relating to any Xxxxxxx products or services. The
description of Xxxxxxx'x product and service warranties set forth in Schedule K
is correct and complete. No Xxxxxxx products or services have been sold that
are subject to any warranty or representation other than the warranty set forth
on Schedule K. Seller is not aware of any warranty claims made or to be made
against or with respect to any products
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or services of Xxxxxxx sold prior to the Latest Balance Sheet Date. The reserve
for warranty claims on the Latest Balance Sheet is adequate to cover all
warranty claims relating to product shipments prior to the date of the Latest
Balance Sheet.
4.17 Employees. (a) To the best knowledge of Seller, no employee of or
consultant to Xxxxxxx has any plans to terminate his or her relationship with
Xxxxxxx; (b) Seller has complied with all "Government Regulations" (as
hereinafter defined) relating to the employment of labor in connection with
Xxxxxxx'x business, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining and the payment of social security and other
taxes; (c) Seller has no labor relations problem pending in connection with
Xxxxxxx'x business, its labor relations in connection with Xxxxxxx'x business
are believed to be satisfactory and to the knowledge of Seller, there has been
no activity to organize employees of Xxxxxxx by any labor union within the past
two years; (d) there are no workers' compensation claims pending against Seller
in connection with Xxxxxxx'x business, nor is Seller aware of any facts that
would give rise to such a claim; (e) to the best knowledge of Seller, no
employee of or consultant to Xxxxxxx is subject to any secrecy or noncompetition
agreement or any other agreement or restriction of any kind that would impede in
any way the ability of such employee or consultant to carry out fully all of his
or her duties to Xxxxxxx; and (f) no employee, consultant, contractor or former
employee, consultant or contractor of, to or for Xxxxxxx has any claim with
respect to any Xxxxxxx Technology.
4.18 Employee Benefit Plans. Schedule L summarizes all pension,
retirement, disability, medical, dental or other health plans, life insurance or
other death benefit plans, profit sharing, deferred compensation agreements,
stock, option, bonus or other incentive plans, vacation, sick, holiday or other
paid leave plans, severance plans or other similar employee benefit plans
maintained by Seller for employees of Xxxxxxx. There are no unfunded
liabilities, contested claims, or "prohibited transactions," as that term is
defined in the Employee Retirement Income Security Act of 1974, as amended, and
the regulations and rulings issued thereunder, with respect to any such plans.
4.19 Insurance. Schedule M lists each insurance policy (the "Insurance
Policies") maintained by Seller with respect to the Assets and operations of
Xxxxxxx.
4.20 Compliance with Laws; Permits.
(a) Except as described on Schedule 4.20(a), to the best of Seller's
knowledge, it has, with respect to the business of Xxxxxxx and Xxxxxxx'x agents
and employees have, complied in all material respects with all applicable laws,
regulations and other requirements ("Government Regulations"), including, but
not limited to, federal, state, local and foreign laws, ordinances, rules,
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regulations and other requirements pertaining to personal and credit data
collection, use and distribution, equal employment opportunity, employee
retirement, affirmative action and other hiring practices, occupational safety
and health, workers' compensation, unemployment and building and zoning codes,
which affect Xxxxxxx'x business, the Assets or the Real Property and to which
the Seller may be subject, and no claims filed against the Seller alleging a
violation of any such Government Regulations, and to the Seller's knowledge, no
conditions or events have occurred which would constitute a breach of any
Government Regulations. Seller has no knowledge of any action, pending or
threatened, to change the zoning or building ordinances or any other Government
Regulations affecting the Assets, the Real Property or Xxxxxxx'x business.
Seller is not relying on any exemption from or deferral of any Government
Regulation that would not be available to Buyer after it acquires the Assets.
(b) Seller has, in full force and effect, all permits from federal, state,
local and foreign authorities (including, without limitation, federal and state
agencies regulating occupational health and safety) necessary to conduct the
business of Xxxxxxx and own and operate Assets (the "Permits"). A true, correct
and complete list of all the Permits is set forth in Schedule G. Seller has
conducted Xxxxxxx'x business in compliance with all material terms and
conditions of the Permits.
(c) In particular, but without limiting the generality of the foregoing,
Seller has not, with respect to the business of Xxxxxxx, violated, and has no
liability, and has not received a notice or charge asserting any violation of or
liability under, the federal Occupational Safety and Health Act of 1970 or any
other federal or state acts (including rules and regulations thereunder)
regulating or otherwise affecting employee health and safety in connection with
its business.
4.21 Environmental Matters.
(a) Seller's operation of the business of Xxxxxxx has been in compliance
in all material respects with, and Seller is not in violation of any applicable
Government Regulations relating to environmental matters ("Environmental Laws"),
including, but not limited to, matters related to air pollution, water pollution
noise control, on-site or off-site hazardous substance (as defined in the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, and including any other dangerous waste) handling, discharge, disposal
or recovery, toxic or hazardous substances or materials (whether products or
waste), asbestos, PCBs, employee safety, and transportation or shipping safety
and no notice of violation of any Government Regulations have been received by
Seller, nor is any such notice threatened. Seller has obtained all environmental
Permits, temporary and otherwise, required for the lawful operation of the
business of Xxxxxxx and all such Permits are in full force and effect and Seller
has no reason to believe
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that any such Permits will be revoked, lapsed, or otherwise subject to
modification upon or following the consummation of the transactions contemplated
hereby.
(b) Except as described on Schedule 4.21(b), to the best of Seller's
knowledge, (i) no hazardous, dangerous or toxic materials have been illegally
generated, contained, handled located, used, manufactured, processed, buried,
incinerated, deposited, stored or released on, under or about any part of the
Real Property, (ii) the Real Property and any improvements thereon, contain no
asbestos, urea, formaldehyde, radon at levels above natural background,
polychlorinated biphenyls (PCBs) or pesticides, and (iii) no above ground or
underground storage or fuel tanks are located on, under or about the Real
Property, or have been located on, under or about the Real Property and then
subsequently been removed or filled. If any such tanks exist on, under or about
the Real Property, such tanks have been duly registered with all appropriate
governmental entities and are otherwise in compliance with all applicable
Environmental Laws. The cost of completely removing the asbestos containing
materials described on Schedule 4.21(b), if removal is required, will not exceed
the estimated costs of such removal as specified on Schedule 4.21(b).
(c) To the best of Seller's knowledge, no expenditure will be required in
order for Buyer to comply with any Environmental Laws in connection with the
operation or continued operation of Xxxxxxx'x business on the Real Property in a
manner consistent with the current operation thereof by Seller.
(d) Seller, on behalf of itself and its successors and assigns, hereby
waives, releases and agrees not to bring any claim, demand, cause of action or
proceeding, including without limitation any cost recovery action, against Buyer
under any Environmental Law in connection with the Buyer's purchase, ownership
or operation of Xxxxxxx'x business and the Assets to the extent any such claim,
demand, cause of action or proceeding is attributable to any actions or
inactions of Seller.
4.22 Brokerage. No third party, other than Xx. Xxxxxxx X. Xxxxxxx, shall
be entitled to receive any brokerage commissions, finder's fees, fees for
financial advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Seller. Seller is solely responsible for any
brokerage fee or commission that may be payable to Xx. Xxxxxxx.
4.23 Miscellaneous.
(a) Xxxxxxx'x books and records are complete and correct, have been
maintained in accordance with good business practice, and accurately reflect the
basis for the financial condition and results of operations of Xxxxxxx as set
forth in the Financial Statements; and
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(b) the Seller has paid all income, sales, use and other taxes of any kind
or nature imposed or assessed by any federal, state or local governmental
authority applicable to the Assets or to Xxxxxxx'x business, income and
operations and has filed all tax returns, including without limitation sales and
use tax returns, required to be filed by Seller.
4.24 Accounts Receivable. The accounts receivable reflected on the Balance
Sheet and all accounts receivable of Xxxxxxx which arose thereafter are valid
and arose out of bona fide transactions in the ordinary course of business. Any
such accounts receivable not yet collected as of the Closing Date will be
collectible (net of an allowance for doubtful accounts not exceeding as a
percentage thereof the allowance for doubtful accounts as a percentage of
accounts receivable shown on the Balance Sheet) within 120 days after the
Closing Date. The accounts receivable reflected in the Balance Sheet and all
accounts receivable arising after the date of the Balance Sheet are valid and
arose out of bona fide transactions in the ordinary course of the business of
Xxxxxxx. The accounts receivable aging report provided at Closing by the Seller
pursuant to Section 8.01(m)(x) shall be a correct and complete statement as of
the Closing of the amounts and aging of the accounts receivable transferred to
the Buyer hereby.
4.25 Employees. The names of current Xxxxxxx employees, their positions
and present rates of compensation are shown on Schedule O.
4.26 Customer Lists. During the twenty-four months preceding the date of
this Agreement the Seller has provided copies of the Xxxxxxx customer list or
portions of the information set forth therein only to the parties identified in
Schedule 4.26, and in each case subject to a written agreement prohibiting the
disclosure of such information to others and prohibiting the use of such
information by the recipient except in order to assist Xxxxxxx.
4.27 Disclosure. No representation or warranty in this Agreement, any of
the Schedules or Exhibits hereto, any of the documents delivered by or on behalf
of Seller pursuant to Article VIII hereof, or any of the Financial Statements
(collectively, the "Documents"), contain any untrue statement of a material
fact. In making such representations and warranties Seller has not willfully
and intentionally omitted any fact which is (a) necessary to make the statements
herein or therein not misleading in the light of the circumstances in which they
have been made, and (b) material to the business of Xxxxxxx as it is currently
conducted.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller that:
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5.01 Incorporation and Corporate Power. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Minnesota, with the requisite corporate power and authority to enter into
this Agreement and perform its obligations hereunder.
5.02 Execution, Delivery; Valid and Binding Agreement. The execution,
delivery and performance of this Agreement by Buyer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite corporate action, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement has been duly executed and delivered by Buyer and constitutes the
valid and binding obligation of Buyer, enforceable in accordance with its terms.
5.03 No Breach. The execution, delivery and performance of this Agreement
by Buyer and the consummation by Buyer of the transactions contemplated hereby
do not conflict with or result in any breach of any of the provisions of,
constitute a default under, result in a violation of, result in the creation of
a right of termination or acceleration or any Lien upon any assets of Buyer or
require any authorization, consent, approval exemption or other action by or
notice to any court or other governmental body, under the provisions of the
Articles of Incorporation or By-laws of Buyer or any indenture, mortgage, lease,
loan agreement or other agreement or instrument by which Buyer is bound or
affected, or any Government Regulation to which Buyer is subject.
5.04 [Omitted.]
5.05 Brokerage. No third party, other than The Chicago Dearborn Company,
shall be entitled to receive any brokerage commissions, finder's fees, fees for
financial advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Buyer. The Buyer is solely responsible for
any brokerage fee or commission that may be payable to The Chicago Dearborn
Company.
ARTICLE VI
COVENANTS OF SELLER
-------------------
PENDING THE CLOSING
-------------------
6.01 Conduct of the Business. In connection with Xxxxxxx, Seller agrees to
observe each item set forth in this Section 6.01 and agrees that, from the date
hereof until the Closing Date, unless otherwise consented to by Buyer in
writing:
(a) The business of Xxxxxxx shall be conducted in accordance with past
practice, and Seller shall not take any action with respect to Xxxxxxx except in
the ordinary course of Xxxxxxx'x
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business. Without limiting the generality of the foregoing, Seller shall not
perform any act referenced by (or omit to perform any act which omission is
referenced by) the terms of Section 4.09;
(b) Seller shall not, directly or indirectly, do or permit to occur any of
the following insofar as they relate to Xxxxxxx'x business or the Assets: (i)
acquire (by merger, exchange, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership, joint venture or other business
organization or division or material assets thereof; (ii) delay or otherwise
modify its practices with respect to the collection of accounts receivable, the
payment of accounts payable or the purchase of inventory; or (vi) enter into any
agreement, arrangement or understanding with respect to any of the matters set
forth in this Section 6.01 (b);
(c) Seller shall (i) use its best efforts to preserve intact the
organization and goodwill of Xxxxxxx, keep available the services of Xxxxxxx'x
employees as a group and maintain satisfactory relationships with licensor,
suppliers, distributors, customers and others having business relationships with
Xxxxxxx in connection with its business; (ii) confer on a regular and frequent
basis with representatives of Buyer to report on operational matters and the
general status of ongoing operations with respect to its business; (iii) not
intentionally take any action which would render, or which reasonably may be
expected to render, any representation or warranty made by it in this Agreement
untrue at the Closing; (iv) notify Buyer of any emergency or other change in the
normal course of its business or in the operations of the properties of its
business and of any governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated); and
(v) promptly notify Buyer in writing if Seller shall discover that any
representation or warranty made by it in this Agreement was when made, or has
subsequently become, untrue in any respect.
6.02 Access to Books and Records. Between the date hereof and the Closing
Date, Seller shall afford to Buyer and its authorized representatives (the
"Buyer's Representatives") full access at all reasonable times and upon
reasonable notice to the offices, properties, records, financial records,
employees and other items of Xxxxxxx and otherwise provide such assistance as is
reasonably requested by Buyer in order that Buyer may have a full opportunity to
make such investigation as it shall reasonably desire to make of its business
and the Assets. In addition, Seller and its officers shall cooperate fully
(including providing introductions where necessary) with Buyer to enable Buyer
to contact such third parties, including customers, prospective customers,
vendors or suppliers of Xxxxxxx, as Buyer deems reasonably necessary to complete
its investigation; provided Buyer agrees not to initiate such contacts without
the prior approval of Seller, which approval will not be unreasonably withheld.
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6.03 Regulatory Filings. If it has not already done so, Seller shall, as
promptly as practicable after the execution of this Agreement, make or cause to
be made all filings and submissions under any laws or regulations applicable to
the consummation of the transactions contemplated herein. Seller will coordinate
and cooperate with Buyer in facilitating such filings and provide such
reasonable assistance as Buyer may request in connection with the foregoing.
6.04 Conditions. Seller shall take all commercially reasonable actions
necessary or desirable to cause the conditions set forth in Section 8.01 to be
satisfied and to consummate the transactions contemplated herein as soon as
reasonably possible after the satisfaction thereof.
6.05 Exclusive Negotiations. The Seller will not solicit, entertain or
engage in any discussions or negotiations with any third party related to a
possible acquisition of any of the Assets (except for sales in the ordinary
course of business) prior to the earlier to occur of October 31, 1996 or the
termination of this Agreement pursuant to Section 9.01.
6.06 Destruction of Certain Customer Lists. Immediately following the
Closing the Seller shall destroy all copies, whether in electronic or tangible
form, of customer lists, including names, addresses, buying patterns, etc., used
by it in connection with the sale of products to healthcare professionals, other
than a record of such information retained by Seller on its marketing data base
for use by Buyer. Seller shall destroy such information contained on its
marketing data base upon written notice from Buyer. Notwithstanding the
foregoing, Seller shall have no obligation to destroy any information that
relates to any customer of Xxxxxxx who has purchased products or services from
another division of the Seller. The Seller shall promptly provide reasonable
evidence to the Buyer that it has taken the actions required of it under this
Section 6.06.
6.07 Real Estate Purchase Agreement. The Seller shall perform in a timely
manner all of its obligations under the Real Estate Purchase Agreement.
6.08 Consents to Assignment. Seller shall obtain with respect to any
contract, lease or agreement of any kind to be sold or assigned to Buyer
hereunder, a consent to assignment from any party from whom such consent is
required under any such contract.
6.09 Certain Software. At Seller's election, Seller shall obtain a
license for the font software from Bloc, comparable in its terms and duration to
the license Seller presently has from Bloc for use by Xxxxxxx, or Seller shall
reimburse Buyer for the cost to Buyer of obtaining such a license.
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ARTICLE VII
COVENANTS OF BUYER
------------------
Buyer covenants and agrees with Seller as follows:
7.01 Regulatory Filings. If it has not already done so, Buyer shall, as
promptly as practicable after the execution of the Agreement, make or cause to
be made all filings and submissions under any laws or regulations applicable to
Buyer for the consummation of the transactions contemplated herein. Buyer will
coordinate and cooperate in facilitating such filings and provide such
reasonable assistance as Seller may request in connection with the foregoing.
7.02 Conditions. Buyer shall take all commercially reasonable actions
necessary or desirable to cause the conditions set forth in Section 8.02 to be
satisfied and to consummate the transactions contemplated herein as soon as
reasonably possible after the satisfaction thereof.
7.03 Employees. Buyer shall extend offers of employment, on terms and
conditions determined by and acceptable to Buyer in its sole discretion, to 95%
of the Xxxxxxx employees actively and currently employed by Seller at the
manufacturing plants located at the Real Property. Buyer does not agree to
employ any specific employee of Seller.
7.04 Real Estate Purchase Agreement. The Buyer shall perform in a timely
manner all of its obligations under the Real Estate Purchase Agreement.
ARTICLE VIII
CONDITIONS TO CLOSING
---------------------
8.01 Conditions to Buyer's Obligations. The obligation of Buyer to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction, or waiver by Buyer, of the following conditions on or before the
Closing Date:
(a) The representations and warranties set forth in Article IV (other
than the representations in Sections 4.09(a), 4.09(g), 4.09(o), 4.20(a),
4.21(a)) hereof shall be true and correct in all material respects at and as of
the Closing Date as though then made and as though the Closing Date had been
substituted for the date of this Agreement, (without taking into account any
disclosures by Seller of discoveries, events or occurrences arising on or after
the date hereof), except that any representation or warranty made as of a
specified date (other than the date hereof) shall only need to have been true in
all material respects on and as of such date;
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(b) The representations and warranties set forth in Sections 4.09(a),
4.09(g), 4.09(o), 4.20(a), 4.21(a) hereof shall be true and correct in all
respects at and as of the Closing Date as though then made and as though the
Closing Date had been substituted for the date of this Agreement, (without
taking into account any disclosures by Seller of discoveries, events or
occurrences arising on or after the date hereof), except that any representation
or warranty made as of a specified date (other than the date hereof) shall only
need to have been true in all respects on and as of such date;
(c) Seller shall have performed in all material respects all of the
covenants and agreements required to be performed and complied with by it under
this Agreement;
(d) Seller shall have satisfied all conditions to closing set out in the
Real Estate Purchase Agreement;
(e) Seller shall have obtained, or caused to be obtained, each consent and
approval necessary in order that the transactions contemplated herein do not
constitute a breach or violation of, or result in a right of termination or
acceleration of, or creation of any Lien on any of the Assets pursuant to the
provisions of any agreement, arrangements or undertaking of or affecting Xxxxxxx
or the Assets, regardless of whether the same is assigned to Buyer pursuant
hereto;
(f) Seller shall have assigned to Buyer the Permits in Schedule G and
Buyer shall, immediately after the Closing, be lawfully authorized to operate
the business of Xxxxxxx under the Seller's Permits, or the Buyer shall have been
issued permits similar to the Permits;
(g) All material governmental filings, authorizations and approvals that
are required for the consummation of the transactions contemplated hereby will
have been duly made and obtained;
(h) No withholding order shall have been issued by the Illinois Department
of Revenue in response to the Buyer's filing of Form NUC-542-A.
(i) There shall not be threatened, instituted or pending any action or
proceeding, before any court or governmental authority or agency, domestic or
foreign: (i) challenging or seeking to make illegal, or to delay or otherwise
directly or indirectly restrain or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages in
connection with such transactions; (ii) seeking to prohibit direct or indirect
ownership or operation by Buyer of all or a material portion of the Assets, or
to compel Buyer or any of its subsidiaries to dispose of or to hold separately
all or a material portion of the business or assets of Buyer and its
subsidiaries, as a result of the
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transactions contemplated hereby; (iii) seeking to invalidate or render
unenforceable any material provision of this Agreement or any of the Other
Agreements; or (iv) otherwise relating to and materially adversely affecting the
value of the Assets or the business of Xxxxxxx;
(j) There shall not be any action taken, or any statute, rule, regulation,
judgment, order or injunction enacted, entered, enforced, promulgated, issued or
deemed applicable to the transactions contemplated hereby by any federal, state
or foreign court, government or governmental authority or agency, which would
reasonably be expected to result, directly or indirectly, in any of the
consequences referred to in Section 8.01(g);
(k) Buyer shall have received from counsel for Seller a written opinion in
the form attached hereto as Exhibit E, dated as of the date of the Closing;
(l) Buyer and Seller shall have executed the Assumption Certificate; and
(m) Seller shall have delivered to Buyer all of the following:
(i) executed copies of the Xxxx of Sale and such other
instruments of conveyance, transfer, assignment and delivery as Buyer shall
have reasonably requested, including such instruments called for under the
Real Estate Purchase Agreement;
(ii) executed copies of the Assignment and Assumption Agreement
and the Transitional Services and Operations Agreement;
(iii) certificates of an officer of Seller satisfactory to Buyer,
dated the Closing Date, stating that the conditions precedent set forth in
subsections (a) and (b) above have been satisfied;
(iv) copies of the third party and governmental consents and
approvals referred to in subsections (d) and (e) above;
(v) a copy of the text of the resolution adopted by the board
of directors of Seller authorizing the execution, delivery and performance
of this Agreement, along with a certificate executed on behalf of Seller,
by its corporate secretary certifying to Buyer that such copy is a true,
correct and complete copy of such resolution, and that such resolution was
duly adopted and has not been amended or rescinded;
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(vi) incumbency certificates executed on behalf of Seller by its
corporate secretary certifying the signature and office of each officer
executing this Agreement or any of the Related Agreements;
(vii) the A/P Report;
(viii) such other certificates, documents and instruments as
Buyer reasonably requests to the transactions contemplated hereby;
(ix) a report showing the aging, as of the Closing Date, of all
accounts receivable being sold hereunder;
(x) a copy of all customer lists used by Xxxxxxx; and
(xi) a copy of each consent required by Section 6.08.
8.02 Conditions to Seller's Obligations. The obligations of Seller to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, or waiver by Seller, of the following conditions on or before the
Closing Date:
(a) The representations and warranties set forth in Article V hereof will
be true and correct in all material respects at and as of the Closing as though
then made and as though the Closing Date had been substituted for the date of
this Agreement;
(b) Buyer shall have performed in all material respects all the covenants
and agreements required to be performed by it under this Agreement;
(c) The conditions set forth in Sections 8.01(f), (g) and (h) shall have
been satisfied;
(d) On the Closing Date, Buyer will have delivered to Seller:
(i) a wire transfer in immediately available funds in the
amount of the cash amount required to be paid at Closing under Section
2.02,
(ii) a certificate of an officer of Buyer satisfactory to
Seller, dated the Closing Date, stating that the conditions precedent set
forth in subsections (a) and (b) above have been satisfied,
(iii) executed copies of the Assignment and Assumption Agreement
and the Transitional Services and Operations Agreement,
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(iv) a copy of the text of the resolutions adopted by the board
of directors of Buyer authorizing the execution, delivery and performance
of this Agreement, along with a certificate executed on behalf of Buyer by
its corporate secretary certifying to Seller that such copy is a true,
correct and complete copy of such resolutions, and that such resolution was
duly adopted and has not been amended or rescinded, and
(v) an incumbency certificate executed on behalf of Buyer by
an officer certifying the signature and office of each officer executing
this Agreement or any of the Related Agreements.
ARTICLE IX
TERMINATION
-----------
9.01 Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by the mutual consent of Buyer and Seller;
(b) by either Buyer or Seller if there has been a material
misrepresentation, breach of warranty or breach of covenant on the part of the
other in the representation, warranties and covenants set forth in this
Agreement;
(c) by either Buyer or Seller if the transactions contemplated hereby
have not been consummated by October 31, 1996; provided that neither Buyer nor
Seller will be entitled to terminate this Agreement pursuant to this Section
9.01(c) if such party's willful breach of this Agreement has prevented the
consummation of the transactions contemplated hereby or if such party has not
diligently taken all actions reasonable and necessary to enable it to deliver
the items to be delivered by it under Section 9 of the Real Estate Purchase
Agreement or to satisfy the conditions to closing to be satisfied by it under
Sections 9 and 17 of the Real Estate Purchase Agreement.
(d) by either Buyer or Seller if the Real Estate Purchase Agreement is
terminated in accordance with its terms.
9.02 Effect of Termination. In the event of termination of this Agreement
by either Buyer or Seller as provided in Section 9.01, this Agreement, except
with respect to the provisions of Sections 11.01 and 11.02 and the non-
disclosure agreement entered into by the parties, shall become void and there
shall be no liability on the part of either Buyer or Seller or their respective
stockholders, officers, or directors, except with respect to breaches of this
Agreement that occur prior to the time of such termination.
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ARTICLE X
INDEMNIFICATION
---------------
10.01 General. Notwithstanding any investigation made by or on behalf of
the parties hereto or the results of any such investigation and notwithstanding
the participation of such party in the Closing, the representations and
warranties contained in Article IV and Article V and the covenants contained in
Article VI and Article VII hereof shall survive the Closing.
(a) Subject to the limitations set forth in Section 10.2, Seller agrees
to indemnify the Buyer with respect to, and hold the Buyer harmless from, any
loss, liability or expense (including, but not limited to, reasonable legal fees
and disbursements) which the Buyer may incur or suffer by reason of, or which
results, arises out of or is based upon (i) the inaccuracy of any representation
or warranty made by Seller in this Agreement, (ii) the failure of Seller to
comply with any of its covenants under this Agreement, or (iii) any liability
arising from Seller's ownership or operation of Xxxxxxx during the period prior
to the Closing Date (other than the Assumed Liabilities).
(b) Subject to the limitations set forth in Section 10.2 the Buyer
agrees to indemnify Seller with respect to, and hold Seller harmless from, any
loss, liability or expense (including, but not limited to, reasonable legal fees
and disbursements) which Seller may incur or suffer by reason of, or which
results, arises out of or is based upon (i) the inaccuracy of any representation
or warranty made by the Buyer in this Agreement, (ii) the failure of the Buyer
to comply with any of its covenants under this Agreement or (iii) any liability
arising from Buyer's ownership or operation of Xxxxxxx during the period after
the Closing Date (other than liabilities which Seller has retained or for which
it is otherwise responsible by virtue of the other provisions of this Agreement
including without limitation liability for a breach of a representation or
warranty made herein).
10.02 Conditions of Indemnification.
(a) Seller's indemnification obligations under this Article X shall only
become operative after, and to the extent that, the total amount of all claims
for indemnification by Seller exceeds $300,000, except that claims resulting
from (i) the inaccuracy of any representation or warranty contained in Section
4.01, 4.03, 4.04, 4.10, 4.15, 4.21, 4.22, or 4.23(b), (ii) any legal proceeding
subject to the provisions of Section 10.4 hereof, or (iii) a breach of the
provisions of Article VI, shall not be subject to such limitation.
(b) Except with respect to (i) an indemnification claim arising from a
willful or intentionally false representation or warranty of Seller, (ii) a
claim based upon the inaccuracy of a
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representation or warranty contained in Section 4.01, 4.03, 4.04, 4.10, or
4.23(b), (iii) a claim arising out of any legal proceeding subject to the
provisions of Section 10.4 hereof, (iv) a claim based on a breach by the Seller
of any of its covenants under this Agreement, or (v) a claim made by the Buyer
prior to eighteen (18) months after the Closing Date which is not resolved by
that date, Seller's indemnification obligations shall terminate eighteen (18)
months after the Closing Date. With respect to a claim under subsection (i) of
this Section 10.2(b), or under Sections 4.01, 4.03, 4.04 or 4.10, Seller's
indemnification obligation shall not terminate at any time; with respect to a
claim under subsection (iii) of this Section 10.2(b) Seller's indemnification
obligation shall terminate upon the expiration of the period of limitations for
the third party claim giving rise to the proceeding under Section 10.4 hereof;
with respect to a claim based on a breach by the Seller of its covenants under
this Agreement, Seller's indemnification obligation shall terminate upon the
expiration of the period of limitations for breach of contract as it relates to
the covenant in issue; and with respect to a claim under Section 4.23(b),
Seller's indemnification obligation shall terminate upon the expiration of the
period for such claim under any applicable statute of limitations.
(c) The liability of Seller under this Article X shall be limited in the
aggregate to $61,500,000.
(d) Except with respect to (i) an indemnification claim arising from a
willful or intentionally false representation or warranty of the Buyer, (ii) a
claim based upon inaccuracy of a representation or warranty contained in Article
V, (iii) a claim arising out of any legal proceeding subject to the provisions
of Section 10.4 hereof, (iv) a claim based on a breach by the Buyer of any of
its covenants under this Agreement, or (v) a claim made by Seller prior to
eighteen (18) months after the Closing Date which is not resolved by that date,
the Buyer's indemnification obligations shall terminate eighteen (18) months
after the Closing Date. With respect to a claim under subsection (i) of this
Section 10.2(d), Buyer's indemnification obligation shall not terminate at any
time; with respect to a claim under subsection (iii) of this Section 10.2(d)
Buyer's indemnification obligation shall terminate upon expiration of the period
of limitations for the third party claim giving rise to the proceeding under
Section 10.4 hereof; and with respect to a claim based on a breach by Buyer of
its covenants under this Agreement, Buyer's indemnification obligation shall
terminate upon expiration of the period of limitations for breach of contract as
it relates to the covenant in issue.
(e) Buyer shall not be entitled to indemnification hereunder for any loss
suffered or incurred by it as a consequence of a breach of the Seller's
representations contained in Sections 4.06, 4.11 or 4.24, to the extent said
losses are recovered by the Buyer by virtue of a refund of a portion of the
Purchase Price under Sections 2.01(a) and 2.03 hereof.
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10.03 Indemnification Claims - Interest. Interest on any claim for
indemnification pursuant to this Article X shall accrue at a rate equal to the
reference rate as publicly announced from time to time by First Bank, N.A.,
Minneapolis, Minnesota, from the date the expense was incurred or suffered until
the date the claim is satisfied by payment.
10.04 Legal Proceedings. In the event the Buyer or Seller becomes
involved in any legal, governmental or administrative proceeding which may be
covered by this indemnification, or if any such proceeding is threatened or
asserted, the indemnified party shall promptly notify the indemnifying party in
writing and in full detail of the filing, or the threat or assertion of such a
filing, and of the nature of any such proceeding (the "Indemnification Notice");
provided that the failure to give such Indemnification Notice to the
indemnifying party shall not relieve the indemnifying party of any obligation
that it may have to the indemnified party except to the extent that the
indemnifying party shall have been materially prejudiced in its ability to
defend the suit, action, claim, proceeding or investigation for which such
indemnification is sought by reason of such failure.
Upon receipt of an Indemnification Notice, the indemnifying party shall be
entitled at its option and at its cost and expense to assume the defense of such
suit, action, claim, proceeding or investigation with respect to which it is
called upon to indemnify an indemnified party pursuant to this Article X;
provided that, notice of the indemnifying party's intention to assume such
defense shall be delivered by the indemnifying party to the indemnified party
within a reasonable time in light of the circumstances after the indemnified
party gives the indemnifying party an Indemnification Notice. In the event that
the indemnifying party elects to assume the defense of such suit, action, claim,
proceeding or investigation, as the case may be, the indemnifying party shall
promptly retain counsel reasonably satisfactory to the indemnified party. The
indemnified party shall have the right to employ its own counsel in any such
suit, action, claim, proceeding or investigation, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless: (i) the
employment of such counsel shall have been authorized by the indemnifying party;
(ii) the indemnifying party shall not within ten (10) days after receipt of an
Indemnification Notice have retained counsel reasonably satisfactory to the
indemnified party to take charge of the defense of such suit, action, claim,
proceeding or investigation; (iii) the named parties to any such proceeding
(including any impleaded parties) include both Seller and Buyer and
representation of both parties by the same counsel would, in the reasonable
judgment of the indemnified party, be inappropriate due to actual or potential
differing interests between them; or (iv) the indemnified party shall have
reasonably concluded that there may be one (1) or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party, in which event, such fees and
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expenses shall be borne by the indemnifying party. In the event of (i), (ii),
(iii) or (iv) above, the indemnifying party shall not have the right to direct
the defense of any suit, action, claim, proceeding or investigation on behalf of
the indemnified party.
If an indemnifying party elects to assume the defense of any suit, action,
claim, proceeding or investigation, no compromise or settlement thereof may be
effected by the indemnifying party without the indemnified party's written
consent (which shall not be unreasonably withheld or unreasonably delayed).
Notwithstanding the foregoing, if any indemnified party determines in good faith
that there is a reasonable probability that an action may materially and
adversely affect it other than as a result of monetary damages, such indemnified
party may, by written notice to the indemnifying party, assume the exclusive
right to defend, compromise or settle such action, but the indemnifying party
shall not be bound by any determination of an action so defended or have any
liability with respect to any compromise or settlement thereof effected without
its consent (which shall not be unreasonably withheld or unreasonably delayed).
If the indemnifying party fails to give written notice to the indemnified
party of its election to assume the defense of any suit, action, claim,
proceeding or investigation for which it is called upon to indemnify an
indemnified party pursuant to this Article X within twenty (20) days after the
indemnified party gives the Indemnification Notice to the indemnifying party,
the indemnifying party shall be bound by any determination made in such suit,
action, claim, proceeding or investigation or compromise or settlement thereof
effected by the indemnified party.
10.05 Remedies Exclusive. After Closing, indemnification under this
Article X shall provide to Seller and the Buyer the sole remedy for any breach
of representations and warranties contained in Articles IV and V and any breach
of covenants contained in Articles VI and VII.
10.06 Arbitration. Any claim for indemnification under this Article X
which is disputed by the indemnifying party shall be settled by binding
arbitration in accordance with the following provisions of this Section 10.6,
provided, however, that any party may seek injunctive relief or other equitable
relief to preserve the status quo pending arbitration.
(a) Either Seller or Buyer may submit any dispute which is subject to
arbitration under this Section 10.6 by giving written notice to the other party.
Within ten (10) business days after receipt of such notice by such other party,
each party shall appoint one arbitrator and within ten (10) business days
thereafter the two arbitrators so appointed shall select a third arbitrator. If
either party shall fail to make such appointment within such 10-day period, the
other party may request the American Arbitration Association to appoint the
second arbitrator. The American
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Arbitration Association may thereupon appoint the second arbitrator. If the two
appointed arbitrators shall fail to select a third arbitrator within said 10-day
period, Buyer and Seller shall mutually select the third arbitrator. If Buyer
and Seller are unable to agree upon such selection, then either may, upon at
least five (5) business days' prior written notice to the other party, request
the American Arbitration Association to appoint the third arbitrator. The
American Arbitration Association may thereupon appoint the third arbitrator. All
arbitrators shall be experienced in corporate and financial matters and shall be
impartial and unrelated, directly or indirectly, so far as employment of
services is concerned, to any of the parties or any of their respective
affiliates. The arbitration shall be conducted in Minneapolis, Minnesota, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, as then in effect, except as otherwise provided in this Section
10.6.
(b) The three arbitrators shall investigate the facts and shall hold
hearings at which the parties may conduct limited discovery, present evidence
and arguments, be represented by counsel, and conduct cross examination. The
three arbitrators shall render a written decision on the matter presented to
them by majority vote as soon as practicable after the appointment of the third
arbitrator and in any event not more than forty-five (45) days after such
appointment. The decision of the arbitrators, which may include equitable relief
but shall not include any award of punitive or exemplary damages, shall be final
and binding on the parties hereto, and judgment upon the decision may be entered
in any court having jurisdiction thereof. If the three arbitrators shall fail to
render a decision within said 45-day period, either party may institute such
action or proceeding in such court as shall be appropriate in the circumstances
and, upon the institution of such action, the arbitration proceeding shall be
terminated and shall be of no further force and effect. The arbitrators will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. For example, if Buyer
submits a claim for $1,000, and if Seller contests only $500 of the amount
claimed by Buyer, and if the arbitrators ultimately resolves the dispute by
awarding Buyer $300 of the $500 contested, then the costs and expenses of
arbitration will be allocated 60% (i.e., 300 / 500) to Seller and 40% (i.e. 200
/ 500) to Buyer. In resolving any dispute, the arbitrators shall apply the
provisions of this Agreement, without varying therefrom in any respect. The
arbitrators shall not have the power to add to, modify or change any of the
provisions of this Agreement.
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ARTICLE XI
POST-CLOSING COVENANTS
----------------------
11.01 Non-Competition.
---------------
(a) Seller agrees that for a period of three years, commencing on the
Closing Date, it will not, directly or indirectly as an owner, partner, co-
venturer, manager or otherwise sell, market, or distribute anywhere in the
United States or Canada, any medical, dental or healthcare forms, supplies or
other products (a "Covered Product") of the sort that it has, through Xxxxxxx,
sold during the three years preceding the date hereof. The Seller will not be
deemed to be in breach hereof if it sells any Covered Product if (i) the Covered
Product was actively sold by a division or subsidiary of the Seller, other than
Xxxxxxx, prior to the date hereof, and (ii) the Seller does not, in connection
with any such sales, tailor its marketing of such products to dentists,
physicians or other healthcare professionals. The Seller agrees that if it
sells any business that sells a Covered Product it will require the purchaser
to observe the obligations of the Seller hereunder with respect to that Covered
Product, and that such requirement will be set out in a written agreement that
expressly provides that it may be enforced by the Buyer. The foregoing shall
not preclude the ownership by the Seller of a debt or equity interest in a
business organization in an amount which does not exceed 5 percent of the
outstanding debt or equity interests in such organization, as long as the Seller
does not exercise operating authority over such organization.
(b) In the event of breach by any Seller of Section 11.01(a), the Buyer
may, in addition to any other rights or remedies existing in its favor, apply
to any court of competent jurisdiction for specific performance or injunctive
or other relief in order to enforce or prevent violations of Section 11.01(a).
In the event of an alleged breach or violation of any of the provisions of
Section 11.01(a), the three-year period described therein shall be tolled until
such alleged breach or violation is resolved.
11.02 Non-Solicitation, etc.
----------------------
(a) Seller agrees that for a period commencing on the date hereof and
continuing for two years in the case of the persons identified in Schedule R
as Shoreview or Champaign Management personnel, and one year in the case of any
other employee, it will not solicit to hire or hire any person employed by the
Buyer or any of Buyer's corporate affiliates in any capacity in connection with
the business of Xxxxxxx as conducted by Buyer or Buyer's affiliates. Seller
shall not be deemed to be in breach of this provision if it hires any person
after such person's employment has been terminated by Buyer or Buyer's
affiliates, provided that Seller has not solicited the hire of such person prior
to the termination of his employment by Buyer or Buyer's affiliates.
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(b) Buyer agrees that for a period commencing on the date hereof and
continuing until the earlier of 180 days after the Closing Date or the date
on which the Georgia press is removed from the Xxxxxxx facility in Champaign,
Illinois, it will not solicit to hire or hire any person who works on the
Georgia press who is employed by the Seller or any of Seller's corporate
affiliates. Buyer shall not be deemed to be in breach of this provision if
it hires any person after such person's employment has been terminated by the
Seller of Seller's affiliates, provided that Buyer has not solicited the hire
of such person prior to termination of his employment by Seller or Seller's
affiliates.
(c) In the event of breach by Seller of Section 11.02(a), the Buyer may,
in addition to any other rights or remedies existing in its favor, apply to any
court of competent jurisdiction for specific performance or injunctive or other
relief in order to enforce or prevent violations of Section 11.02(a). In the
event of an alleged breach or violation of any of the provisions of Section
11.02(a), the periods described therein shall be tolled until such alleged
breach or violation is resolved.
(d) In the event of breach by Buyer of Section 11.02(b), the Seller may,
in addition to any other rights or remedies existing in its favor, apply to any
court of competent jurisdiction for specific performance or injunctive or other
relief in order to enforce or prevent violations of Section 11.02(b).
11.03 Delivery of Audited Financial Statements. On or before the sixty-
fifth day following the Closing Date the Seller shall deliver to Buyer either
(a) audited financial statements for the two years ended December 31, 1995 and
December 31, 1994 and comparative unaudited financial statements for Xxxxxxx for
the six-month periods ended June 30, 1996 and June 30, 1995, or (b) audited
financial statements consisting of a statement of assets and liabilities
acquired, as of December 31, 1994 and December 31, 1995, a statement of revenues
and direct expenses for the two years ended December 31, 1995, and comparative
unaudited financial statements for Xxxxxxx for the six-month periods ended June
30, 1996 and June 30, 1995. In this connection, the Buyer shall use its best
efforts to secure authorization from the Securities and Exchange Commission to
satisfy the requirements of Rule 3-05 by providing the financial statements
described in (b). If the Securities and Exchange Commission authorizes the
Buyer to provide the financial statements described in (b), then the Seller
shall deliver those financial statements; otherwise the Seller shall deliver
the financial statements described in (a). Buyer shall promptly inform Seller
whether the Securities and Exchange Commission will accept the same. All such
financial statements shall be sufficient to meet the requirements of Rule 3-05
of Regulation S-X of the Securities and Exchange Commission, and shall be
prepared in accordance with generally accepted accounting principles applied on
a consistent basis. The delivery of such financial statements, accompanied by
a report of independent
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auditors manually signed by Deloitte & Touche (or any other Big Six accounting
firm) with respect to all December 31, 1995 and December 31, 1994 statements,
and a statement signed by the chief financial officer of the Seller with respect
to the 1996 and 1995 six-month financial statements to the effect that the six-
month financial statements present fairly, in all material respects, the
financial position and results of operations of Xxxxxxx in conformity with
generally accepted accounting principles, shall be deemed to constitute timely
completion by the Seller of its obligation under this Section 11.03. The Seller
acknowledges that the Buyer requires such financial statements in connection
with filings it is required to make with the Securities and Exchange Commission,
and that the Buyer will suffer substantial damage in the event of a failure by
the Seller to perform to obligations under this Section.
ARTICLE XII
MISCELLANEOUS
-------------
12.01 Press Releases and Announcements. Prior to the Closing Date, neither
party hereto shall issue any press release (or make any other public
announcement) related to this Agreement or the transactions contemplated hereby
or make any announcement to the employees, customers or suppliers of Seller
without prior approval of the other party hereto, except as may be necessary,
in the opinion of counsel to the party seeking to make disclosure, to comply
with the requirements of this Agreement or applicable law. If any such press
release or public announcement is so required, the party making such disclosure
shall consult with the other party prior to making such disclosure.
12.02 Expenses. Seller and Buyer will pay all of their own expenses
(including attorneys' and accountants' fees, in connection with the negotiation
of this Agreement, the performance of their respective obligations hereunder and
the consummation of the transactions contemplated by this Agreement (whether
consummated or not).
12.03 Further Assurances. Seller agrees that, on and after the Closing
Date, it shall take all appropriate action and execute any documents,
instruments or conveyances of any kind which may be reasonably necessary or
advisable to carry out any of the provisions hereof, including, without
limitation, putting Buyer in possession and operating control of Xxxxxxx, and
the Assets.
12.04 Books and Records. Buyer and Seller agree that so long as any books,
records and files retained by Seller relating to the business of Xxxxxxx, or the
books, records and files delivered to the control of Buyer pursuant to this
Agreement to the extent they relate to the operations of Xxxxxxx prior to the
Closing Date, remain in existence and available, each party (as its expense)
shall have the right upon prior notice to inspect and to make
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copies of the same at any time during business hours for any proper purpose.
Buyer and Seller shall use reasonable efforts not to destroy or allow the
destruction of any such books, records and files without first offering in
writing to deliver them to the other.
12.05 Amendment and Waiver. This Agreement may not be amended or waived
except in a writing executed by the party against which such amendment or waiver
is sought to be enforced. No course of dealing between or among any persons
having any interest in this Agreement will be deemed effective to modify or
amend any part of this Agreement or any right or obligations of any person under
or by reason of this Agreement.
12.06 Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provision of this Agreement will be in
writing and will be deemed to have been given when personally delivered or three
business days after being mailed by first class U.S. mail, return receipt
requested, or when receipt is acknowledged, if sent by facsimile, telecopy or
other electronic transmission device. Notices demands and communications to
Buyer and Seller will, unless another address is specified in writing, be sent
to the address indicated below:
Notices to Buyer: with a copy to:
---------------- --------------
Xxxxxxxxx Dental Company Xxxxxx & Xxxxxx
0000 Xxxxxxx Xxxxxxx Xxxx 0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
Xx. Xxxx, XX 00000 Xx. Xxxx, XX 00000
Attention: Attention: Xxxxx X. Xxxx
Telecopy: (612) Telecopy: (000) 000-0000
Notices to Seller: with a copy to:
----------------- --------------
Deluxe Corporation Deluxe Corporation
0000 X. Xxxxxxx Xxxx 0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xx 00000 Xx. Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
12.07 Assignment. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by
either party, except to an affiliate of such party, without the prior written
consent of the other party.
12.08 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such
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provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
12.09 Complete Agreement. This Agreement and Other Agreements, and the
Non-disclosure Agreement entered into by the parties on June 27, 1996, contain
the complete agreement between the parties with respect to the subject matter
thereof, and supersede any prior understandings, agreements or representations
by or between the parties, written or oral, which may have related to the
subject matter thereof in any way.
12.10 Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
instrument.
12.11 Governing Law. The internal law, without regard to conflicts of laws
principles, of the State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.
12.12 Buyer's Investigation. Notwithstanding any investigation or other
due diligence heretofore conducted by the Buyer or its affiliates or agents, the
Seller agrees that the Buyer is entering into this transaction in reliance on
the representations and warranties of the Seller set forth in this Agreement,
which reliance the Seller acknowledges is intended and justified.
12.13 Rights of Third Parties. Nothing in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any person other than the parties hereto and their respective
permitted successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any right
of subrogation or action over or against any party to this Agreement.
12.14 Binding Effect; Assignment. This Agreement shall be binding on, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXXXX DENTAL COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Its Vice President
--------------------------
-00-
XXXXXX XXXXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Its Vice President
--------------------------
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