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EXHIBIT 10.41
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
June 27, 1997, by and among BRISTOL TECHNOLOGY SYSTEMS, INC., a Delaware
corporation ("Bristol"); PACIFIC MERGER CORP., a Delaware corporation
("Purchaser"); PACIFIC CASH REGISTER AND COMPUTER, INC., a California
corporation ("Company"); and XXXXXX XXXXXXX and XXXXXX XXXXXXX, residents of the
State of California (individually, a "Shareholder" and, collectively, the
"Shareholders").
RECITALS
A. Bristol owns all of the issued and outstanding capital stock of
Purchaser.
B. The Shareholders own all of the issued and outstanding capital
stock of Company.
C. This Agreement contemplates a forward subsidiary merger of Company
with and into Purchaser in a tax free reorganization pursuant to Code Section
368(a)(2)(D), whereby the Shareholders shall exchange all of their shares of
capital stock of Company (the "Company Shares") for cash and shares of
non-registered, restricted Common Stock of Bristol (the "Restricted Stock"). The
Restricted Stock is the same class and subject to all of the rights, and no
further restrictions other than transferability, than Bristol's Common Stock
currently listed and traded on NASDAQ.
D. The parties hereto expect that the merger will further certain of
their business objectives, including, without limitation, increased market
share, reduced administrative costs, volume efficiencies, improved value added
operations, quicker on-site service, greater product diversity and enhanced
service and support of end-user installations.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties herein contained, the parties hereto do hereby
agree as follows:
ARTICLE 0
CERTAIN DEFINITIONS
Capitalized terms not ascribed a meaning in this Section 0 shall have
the meaning ascribed to such term elsewhere in this Agreement. The capitalized
terms set forth below shall have the following meanings:
"Approval" has the meaning set forth in Section 2.5(d).
"Certificates" has the meaning set forth in Section 1.1.
"Class I Inventory" and "Class II Inventory" have the meanings set
forth in Section 2.4(c).
"Closing" has the meaning set forth in Section 1.4.
"Closing Date" has the meaning set forth in Section 1.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Shares" has the meaning set forth in Recital C.
"Confidential Information" means any information concerning the
business and affairs of Company that is not already generally available to the
public.
"Delaware General Corporation Law" means the General Corporation Law
of the State of Delaware, as amended.
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"Effective Bristol Share Price" means (i)(a) the closing price per
share of Bristol's publicly traded Common Stock on June 16, 1997, plus (b) the
closing price per share of Bristol's publicly traded Common Stock on June 26,
1997 (or, if such date is not a trading day, the last trading day prior to such
date), plus (c) the Interim Period Average (as defined below), divided by (ii)
three (3). "Interim Period Average" means the sum of the closing prices of
Bristol's publicly traded Common Stock on every trading day from and including
the date referenced in clause (a), above, and through and including the date
referenced in clause (b), above, divided by the number of trading days included
in such period. The closing price of Bristol's publicly traded Common Stock on a
trading day, for purposes of this calculation, shall be the day's last trade
price as reported on NASDAQ.
"Effective Time" has the meaning set forth in Section 1.1.
"Employee Benefit Plan" means any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan; (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan; (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan); or (iii) Employee Welfare Benefit Plan or
fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Encumbrance" means any mortgage, pledge, lien, encumbrance, security
interest, charge, option, or other adverse interest, other than (i) mechanic's,
materialmen's, and similar liens; (ii) liens for Taxes not yet due and payable
or for Taxes that Company is contesting in good faith through appropriate
proceedings; (iii) purchase money liens and liens securing rental payments under
capital lease arrangements; and (iv) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" has the meaning set forth in Section 2.3(a).
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Hazardous Substances" has the meaning set forth in Section 2.5(d).
"Knowledge" means that Company and the Shareholders are actually or
reasonably should be aware of the fact or matter in question after a reasonable
investigation concerning the existence of such fact or matter.
"Leased Premises" has the meaning set forth in Section 2.4(a).
"Leases" has the meaning set forth in Section 2.4(a).
"Liability" means any debt, claim, loss, liability, damage, judgment,
fine, penalty, cost, expense or other obligation of any nature, whether known or
unknown, asserted or unasserted, absolute or contingent, liquidated or
unliquidated, or due or to become due, including any Liability for Taxes.
"Materially Adverse Effect" means a materially adverse effect on the
business, financial condition, sales, results of operation, prospects,
customers, suppliers, employee relations, insurability, assets or properties of
Company.
"Merger" has the meaning set forth in Section 1.1.
"Net Worth" means the difference between (i) the audited aggregate
book value of the assets of Company, and (ii) the aggregate book value of the
liabilities of Company.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
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"Personal Property" has the meaning set forth in Section 2.4(b).
"Pre-Tax Earnings" means earnings before income taxes, as determined
in accordance with GAAP.
"Restricted Stock" has the meaning set forth in Recital C.
"Surviving Corporation" has the meaning set forth in Section 1.1.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs, duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on, minimum,
estimated, or other tax, duty or assessment of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE I
THE BASIC TRANSACTION
1.1 The Merger. On and subject to the terms and conditions of this
Agreement, Company will merge with and into Purchaser (the "Merger") on July 31,
1997 (the "Closing Date"), at such time (the "Effective Time") as the Purchaser
and Company file Certificates of Merger (the "Certificates") with the
Secretaries of State of the States of Delaware and California, substantially in
the form of Exhibits "A" and "B" hereto. Purchaser shall be the corporation
surviving the Merger (the "Surviving Corporation").
1.2 Actions Taken on or Prior to the Closing Date. On or prior to the
Closing Date. Bristol and Purchaser shall conduct a legal, financial and
business due diligence investigation of Company and the parties hereto shall
perform their respective delivery obligations set forth in Article 6, below.
1.3 Effect of Merger.
1.3.1 General. At the Effective Time, the Merger shall have the
effect set forth in Sections 259, 260 and 261 of the Delaware General
Corporation Law. Without limiting the foregoing, Surviving Corporation may, at
any time after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either Purchaser or
Company in order to carry out and effectuate the transactions contemplated by
this Agreement.
1.3.2 Certificate of Incorporation. The Certificate of
Incorporation of Purchaser in effect at and as of the Effective Time shall
remain the Certificate of Incorporation of Surviving Corporation.
1.3.3 By-laws. The By-laws of Purchaser in effect at and as of
the Effective Time shall remain the By-laws of Surviving Corporation.
1.3.4 Directors and Officers. The directors of Surviving
Corporation at and as of the Effective Time shall be Xxxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx, and Xxxxxx Xxxxxxx, in each case until their
successors are elected and qualified. The officers of Surviving Corporation at
and as of the Effective Time shall be those individuals holding such positions
as set forth on Schedule 1.3.4, in each case until their successors are elected
and qualified. Bristol hereby agrees that it shall vote all of its shares of the
Surviving Corporation to cause Xxxxxx Xxxxxxx to continue to serve as a member
of the Surviving Corporation's Board of Directors until such time as the
Employment Agreement to be entered into between Xxxxxx Xxxxxxx and the Surviving
Corporation terminates.
1.3.5 Conversion of Company Shares. At and as of the Effective
Time, the Company Shares owned by the Shareholders shall be converted into the
right of the Shareholders to exchange their Company Shares at the Closing for
cash
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and Restricted Stock in accordance with Sections 1.4, 1.5 and 1.6, below.
Upon such conversion, no Company Share shall be deemed to be outstanding or to
have any rights attributed to it other than those set forth in this Section
1.3.5. The Shareholders shall deliver all of their Company Shares to Purchaser
on or before the Closing Date and such shares shall be canceled at the Closing.
1.3.6 Capital Stock of Purchaser and Bristol. Each share of
capital stock of Purchaser and Bristol, including, but not limited to, each
share of Restricted Stock, issued and outstanding at and as of the Effective
Time shall remain issued and outstanding.
1.4 Closing. If the conditions to close, as set forth in Article 5,
below, are satisfied, then the parties hereto shall meet on the Closing Date at
the offices of Bristol, located at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000, commencing at 10:00 a.m. local time (the "Closing"), or at
such other place or in such other manner as the parties shall mutually agree. On
the Closing Date, Purchaser shall file the Certificates and, immediately
thereafter deliver to the Shareholders the "Aggregate Consideration" stated
immediately below.
1.4.1 Aggregate Consideration. The total aggregate consideration
(the "Aggregate Consideration") to be delivered to the Shareholders at Closing
is as follows:
(a) One Hundred Fifty Thousand Dollars ($150,000) in
readily available funds, to be distributed in the same percentage as the
Shareholders' respective stock ownership in the Company;
(b) One Hundred Sixty-Six Thousand Two Hundred Fifty
Dollars ($166,250) worth of Restricted Stock, the value of which will be the
Effective Bristol Share Price, rounded down to the nearest whole number of
shares, to be distributed in the same percentage as the Shareholders' respective
stock ownership in the Company; provided, however, that the delivery of such
Restricted Stock shall be subject to the provisions of Section 1.6 below;
(c) Fifty-Eight Thousand Seven Hundred Fifty Dollars
($58,750) worth of "Additional Restricted Shares," which is defined and is
subject to downward adjustment as specified in Section 1.5, below, to Xxxxxx
Xxxxxxx; and
(d) Two Thousand Three Hundred Twenty-Four Dollars
($2,324) to Xxxxxx Xxxxxxx in total satisfaction of a promissory note issued to
Xx. Xxxxxxx, a copy of which is attached as Exhibit "C."
1.5 Additional Restricted Shares. "Additional Restricted Shares"
means capital shares of Bristol of the same class and subject to the same
restrictions as the Restricted Stock. The purpose in issuing the Additional
Restricted Shares is to acknowledge the perceived value of the Company, based
upon Purchaser's and the Shareholders' common understanding of the Company's
Pre-Tax Earnings and future earnings potential. However, due to the relatively
small scale of the transaction contemplated by this Agreement, Purchaser and
Shareholders do not think it prudent or cost effective to perform an audit of
the Company's financial statements or past performance. As such, Purchaser
wishes to withhold a portion of the Aggregate Consideration until such time as
the Company's post-closing performance verifies the parties' projections and
understandings as to the Company's value. If the Company's Pre-Tax Earnings for
the fiscal year ending December 31, 1997 equal or exceed Eighty Thousand Dollars
($80,000), then the Additional Restricted Shares will become transferable, free
and clear of all restrictions, conditions and/or encumbrances, except for those
restrictions set forth on the legend of the Restricted Additional Shares. To the
extent that the Company's Pre-Tax Earnings for that period are less than Eighty
Thousand Dollars ($80,000), then a proportionate amount of the Additional
restricted Shares will be returned to Bristol and canceled in accordance with
Section 1.5(b), below.
(a) Company's Pre-Tax Earnings Defined. For the purposes of this
Section 1.5 only, the terms in the phrase "Company's Pre-Tax Earnings" will have
the same meaning as otherwise ascribed in this Agreement, modified as follows:
(i) "Company" means Pacific Cash Register and Computer,
Inc., as it existed from January 1, 1997 through the Closing Date, and that
portion of Purchaser's post-closing business formerly owned, operated by, and/or
attributable to, the acquisition of Pacific Cash Register and Computer, Inc.
from the Closing date through December 31, 1997.
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(ii) "Pre-Tax Earnings" will include appropriate
adjustments to take into consideration any diversion or reassignment of sales or
income to a division, parent or subsidiary of the Purchaser, in addition to
adjustments to offset any expenses, which are attributable to such division,
parent or subsidiary. Pre-Tax Earnings will also be adjusted to exclude any
expenses in any way relating to or arising from the merger transaction herein
contemplated, including but not limited to all attorney or professional fees. In
addition, in determining Pre-Tax Earnings any set aside for uncollectible
accounts receivable shall not exceed the greater of (i) the amount set forth in
the "Closing Balance Sheet" (as defined in Section 1.6, below); or (ii) if
Bristol or Purchaser believe such amount to be inadequate, the amount determined
by Bristol's independent accounting firm.
(iii) "Pre-Tax Earnings" shall include earnings derived
from sales by Company employees of new products made available to Company as a
result of the Merger.
(b) Effect of Failing to Meet Earnings Restriction. If in
accordance with GAAP (after giving consideration to the factors specified in
Section 1.5(a)), it is determined that the Company's Pre-Tax Earnings are less
than Eighty Thousand Dollars ($80,000) for fiscal year ending December 31, 1997,
then Xxxxxx Xxxxxxx will return $4.6865 worth of the Additional Restricted
Shares to Bristol for each dollar by which Eighty Thousand Dollars ($80,000)
exceeds the Company's Pre-Tax Earnings for that period. The value of the
Additional Restricted Shares to be returned shall be based upon the average
closing price of Bristol's publicly traded Common Stock for the ten (10) trading
days immediately preceding December 31, 1997, rounded down to the nearest whole
number of shares. The Shareholders' liability under this paragraph will be
limited solely to a return of the Additional Restricted Shares and will not
create any obligation to pay any deficit balance in the event the market value
for the Bristol Common Stock has declined since the date of issuance or
otherwise. The balance of the Additional Restricted Shares after returning a
proportionate amount of shares pursuant to this paragraph, if any, will remain
the property of Xxxxxx Xxxxxxx, free of any conditions, restrictions and/or
encumbrances, except for those restrictions set forth on the legend of the
Additional Restricted Shares.
(c) Additional Provisions. During the period after issuance but
before the Company's Pre-Tax Earnings are formally determined, Xxxxxx Xxxxxxx
will be entitled to receive any dividends paid with respect to the Additional
Restricted Shares. During this period, Xxxxxx Xxxxxxx may not sell, transfer,
assign, encumber, option, hypothecate or enter into any agreement to otherwise
dispose of such shares. Certificates evidencing such shares will indicate that
the shares are restricted in accordance with this Section 1.5 and Section 4.7,
below.
1.6 Escrow Account. The purpose of this Section 1.6 is to acknowledge
the perceived Net Worth of the Company as of the Closing Date. As discussed
above, due to the relatively small scale of the transaction contemplated by this
Agreement, Purchaser and Shareholder do not think it is prudent or cost
effective to perform an audit of the Company's balance sheet at the Closing
Date. Bristol and Purchaser therefore desire to escrow a portion of the
Aggregate Consideration until such time as Bristol and Purchaser can verify the
parties anticipated Net Worth of the Company as of the Closing Date of $117,000
(the "Anticipated Closing Date Net Worth"). As such, immediately after the
Effective Time and on the Closing Date, Bristol shall deposit with Stradling,
Yocca, Xxxxxxx & Xxxxx ("the Escrow Agent") Seventy-Five Thousand Dollars
($75,000) worth of Restricted Stock (the "Escrowed Stock"). The Escrow Agent
shall (i) hold the Escrowed Stock; and (ii) distribute the Escrowed Stock in
accordance with this Section 1.6.
(a) Closing Balance Sheet. Promptly after the Closing Date,
Xxxxxx Xxxxxxx shall prepare a balance sheet for the Company as of the Closing
Date (the "Closing Balance Sheet"), which arrives at the Anticipated Closing
Date Net Worth. If, for any reason during the period ending one-hundred twenty
(120) days from the Closing Date, the Chief Financial Officer of Bristol believe
that a downward adjustment to the Anticipated Closing Date Net Worth is
appropriate, then Bristol shall submit to the Shareholders in writing the amount
of the proposed downward adjustment and a reasonable description of the reasons
for such adjustment (the "First Notice"). If the Shareholders fail to notify
Bristol in writing (the "Second Notice") of their objection to the proposed
downward adjustment within fifteen (15) days of receipt of the First Notice,
then such downward adjustment shall be deemed final and binding upon the parties
hereto. If the Shareholders deliver the Second Notice within such fifteen (15)
day period, then the issue of whether such downward adjustment is appropriate
shall be submitted to Bristol's independent accountants, who shall determine the
appropriateness of the downward adjustment in accordance with GAAP. The
determination of Bristol's independent auditors shall be final and binding upon
the parties hereto.
(b) Distribution of Escrowed Stock. Subject to subparagraphs (i)
and (ii), below, following the expiration of the later of (1) the period ending
one hundred twenty (120) days from the Closing Date; or (2) the resolution of
any downward adjustments in accordance with Section 1.6(a), above, the Escrow
Agent shall deliver to the Shareholders the
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Escrowed Stock, to be distributed among the Shareholders in the same percentage
as the Shareholders' respective stock ownership in the Company.
(i) If a downward adjustment to the Anticipated Closing
Date Net Worth is deemed final in accordance with Section 1.6(a), above, then
the Escrowed Stock otherwise due Shareholders under Section 1.6(b), above, shall
be reduced, on a dollar for dollar basis, by the amount of such downward
adjustment. For purposes of any such reduction, the value of the Escrowed Stock
shall be deemed to be equal to the Effective Bristol Share Price.
(ii) The number of shares of Escrowed Stock reduced
pursuant to subparagraph (i), above, if any, shall be delivered by the Escrow
Agent to Bristol.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF COMPANY AND THE SHAREHOLDERS
Company and the Shareholders jointly and severally represent and
warrant to, and agree with, Bristol, Purchaser and Surviving Corporation that
(except for changes contemplated by this Agreement), each of the following
statements is true, correct and complete as of the date of this Agreement and
will be true, correct and complete as of the Closing Date (each such statement
to be made again by Company and the Shareholders on that date with the Closing
Date being substituted for the date of this Agreement throughout this Article
2):
2.1 Organization and Authority.
(a) Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California, has all requisite
corporate power and authority to carry on its business as currently conducted
and to own or lease and operate its properties, and is duly qualified to do
business as a foreign corporation in each jurisdiction where its business makes
such qualification necessary. Company and the Shareholders have the requisite
power to enter into this Agreement and to carry out their respective obligations
hereunder.
(b) The copies of the Articles of Incorporation and the By-laws
of Company which have been heretofore made available to Purchaser and Bristol,
are true copies of such instruments as amended to date, and such instruments are
in full force and effect. The stock certificates, transfer books and minute
books of Company heretofore made available to Purchaser and Bristol are true and
complete and constitute all of the stock certificates, transfer books and minute
books of Company.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by Company's Board of Directors and shareholders, and no other proceedings on
the part of Company are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement is a valid and binding
obligation of Company and the Shareholders enforceable in accordance with its
terms except as enforcement may be limited to bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors rights generally and except
that the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefor may
be brought.
(d) Except as disclosed in Schedule 2.1(d) attached hereto, there
are no persons or entities of any kind in which Company owns, directly or
indirectly, any shares of capital stock, or any partnership, membership, joint
venture or equitable or similar interest.
(e) Except as set forth on Schedule 2.1(e)(1) attached hereto, no
consent, approval or authorization of, or declaration, filing or registration
with, any third party, including any government or regulatory authority, is
required in connection with the execution and delivery by Company or the
Shareholders of this Agreement and the consummation by Company and the
Shareholders of the transactions contemplated hereby. Except as set forth on
Schedule 2.1(e)(2) attached hereto, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
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(i) conflict with, result in a breach of, or constitute a default under any of
the terms, conditions, or provisions of the Articles of Incorporation or By-laws
of Company; (ii) violate any law, order, judgment or decree to which any of
Company's properties or assets are bound; (iii) violate or constitute a default
under (whether after the giving of notice, passage of time or both), or permit
the termination of, or impair any rights or increase any obligations of Company
under, any agreement or instrument to which Company is a party or by which any
part of Company's properties or assets is bound; or (iv) result in the
acceleration of the maturity of any debt or obligation of Company or in the
creation or imposition of any Encumbrance upon any of the property or assets of
Company.
2.2 Capitalization. The authorized capital stock of Company consists
of 2,000 shares of common stock, $10 par value per share, of which 1,000 shares
are issued and outstanding. All outstanding capital stock of Company was duly
authorized and validly issued, and is fully paid and nonassessable. Company does
not have outstanding, and is not bound by, any option, warrant or other right,
call or commitment to issue, or any obligation or commitment to purchase, any of
its capital stock or any securities convertible into or exchangeable for any of
its authorized capital stock. The Shareholders (i) own all of the outstanding
capital stock of Company; (ii) are the sole legal and beneficial owners of that
number of Company Shares set forth on Schedule 2.2(1) hereto; (iii) are in
possession of the certificate(s) representing such shares; (iv) own such shares
free and clear of all Encumbrances with respect thereto; and (iv) have the full
power, authority and right to exchange, surrender and cancel such shares in
accordance with this Agreement and to perform their obligations hereunder with
respect to the exchange, surrender and cancellation of such shares. Except as
set forth on Schedule 2.2(2) attached hereto, there are no buy-sell agreements,
shareholders' agreements or similar agreements relating to any of the shares of
the capital stock of Company.
2.3 Financial Matters.
(a) Attached hereto as Schedule 2.3(a)(1) are the unaudited
balance sheets of Company at December 31, 1994, at December 31, 1995, at
December 31, 1996, and at March 31, 1997, the related statements of income,
shareholders' equity and cash flows for the annual and three (3) month period
then ended, respectively, and the related notes to such financial statements
(all of such financial statements and notes being hereinafter referred to as the
"Financial Statements"). Except as set forth in Schedule 2.3(a)(2) attached
hereto, the Financial Statements (including the notes thereto) (i) present
fairly and accurately the financial condition of Company as of such dates and
the results of operations of Company for such periods; and (ii) are correct and
complete, and are consistent with the books and records of Company (which books
and records are correct and complete).
(b) Company does not have any Liabilities, other than those which
(i) are set forth in the Financial Statements; (ii) have been specifically and
expressly disclosed in the Schedules hereto by reference to the specific Section
of this Agreement to which such disclosure relates; (iii) have been incurred
since the date of the most recent Financial Statements in the Ordinary Course of
Business in amounts and on terms consistent, individually and in the aggregate,
with Company's past practice; or (vi) are expressly contemplated by this
Agreement, except for those costs and liabilities incurred in connection with
the Merger.
(c) Since the date of the March 31, 1997 Financial Statements,
(i) Company has operated its business only in the Ordinary Course of Business;
(ii) there has not occurred any event, condition or circumstance that has had or
is likely to have a Materially Adverse Effect on Company; (iii) Company has not
issued or sold, or contracted to sell, any of its capital stock, notes, bonds or
other securities, or any option to purchase the same, or entered into any
agreement with respect thereto; (iv) Company has not incurred any property
damage, destruction or similar loss in an aggregate amount exceeding Ten
Thousand Dollars ($10,000) whether or not covered by insurance; (v) Company has
not suffered any loss or any prospective loss, of any significant supplier,
distributor, licensor, contractor or customer or altered any contractual
arrangement with any such supplier, distributor, licensor, contractor or
customer; (vi) Company has not incurred any Liability, made any expenditure, or
sold any assets or properties, except in each case in the Ordinary Course of
Business, consistent with past practices and at arms-length; (vii) there has
been no declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of Company, and Company has not
redeemed, repurchased or otherwise acquired any of its capital stock or
securities convertible into or exchangeable for its capital stock or entered
into any agreement to do so; (viii) Company has not made any prepayments on any
of its Liabilities, securities or other obligations, other than trade payables
in the Ordinary Course of Business; (ix) there has not been any increase in the
rate of compensation payable or to become payable to any of Company's officers
or employees or any increase in the amounts paid or payable to such officers or
employees under any bonus, insurance, pension or other benefit plan, or any
arrangements theretofore made for or with any of such officers or employees; (x)
Company has not adopted or amended any benefit plan, agreement, trust, fund or
other arrangement for the benefit of employees except as required by Tax laws;
and (xi) except as required by applicable law, there has been no change in any
accounting principle, procedure or practice followed by Company or in the method
of applying such principle, procedure or practice.
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(d) Attached as Schedule 2.3(d) is a list containing all
distributions, credits or compensation, of any nature, paid or to be paid to the
Shareholders by Company in fiscal year 1996 and 1997.
2.4 Assets.
(a) Company owns no real property. Schedule 2.4(a) attached
hereto contains a list of all real property leased by Company (the "Leased
Premises"), together with copies of each of the leases (the "Leases"), including
the name of the landlord or sublandlord, a description of the Leased Premises,
the commencement and expiration dates of the current term, the security
deposited by Company with the landlord or sublandlord, if any, and the monthly
rental (including all base rent and all additional rents). Each Lease is in full
force and effect and has not been assigned, modified, supplemented or amended,
and neither Company nor the landlord or sublandlord under any Lease is in
default under any of the Leases, and no circumstance or state of facts exists
which, with the giving of notice or passage of time, or both, would permit the
landlord or sublandlord under any Lease to terminate any Lease.
(b) Schedule 2.4(b) attached hereto contains a list of all
personal property (other than inventory and other than items with a book value
of less than Ten Thousand Dollars ($10,000)) ("Personal Property") and real
property improvements (including fixtures but excluding items with a book value
of less than Ten Thousand Dollars ($10,000)) owned by Company. All Personal
Property and real property improvements of Company are in good condition and
repair and are adequate for the uses to which they are being put or would be put
in the Ordinary Course of Business, and such Personal Property and real property
improvements are not in need of maintenance or repair except for routine
maintenance and repair and as otherwise disclosed on Schedule 2.4(b).
(c) The inventory of Company is comprised of two types: (i)
inventory held for sale to customers ("Class I Inventory"), which inventory is
identified on Schedule 2.4(c)(i) attached hereto; and (ii) inventory of
products, parts and supplies held for customer support and service ("Class II
Inventory"), which inventory is identified on Schedule 2.4(c)(ii) attached
hereto. Each item of Class I Inventory is in good and marketable condition and
fit for the purpose for which it was produced or manufactured, and each item of
Class II inventory is fairly and reasonably valued on the balance sheet of the
most recent Financial Statements and is not obsolete, damaged or defective
(except for obsolescence, damages or defects which in the aggregate are not
likely to have a Materially Adverse Effect on Company).
(d) The accounts receivable of Company reflected on the balance
sheet of the March 31, 1997 Financial Statements have arisen from sales or the
rendering of services in the Ordinary Course of Business and are not in dispute
or subject to any setoffs, discounts, credits, reductions or counterclaims
whatsoever and, with usual and ordinary collection efforts, will be paid in
full, net of reserves reflected on such balance sheet, without resort to legal
action.
(e) Company owns, licenses or otherwise has the full right to
use, all patents, trademarks, trade names, service marks, copyrights,
technology, know-how and processes, and confidential information used in the
conduct of its business. Schedule 2.4(e)(1) attached hereto contains a list of
all registered and unregistered patents, trademarks, trade names, service marks
and copyrights used by Company, all applications therefor and all licenses and
other agreements relating thereto, which are owned by Company or used in the
business of Company. No consent of any third party will be required for the use
thereof upon completion of the transactions contemplated by this Agreement. No
claims are currently being asserted by any person or entity with respect to the
use of any such patents, trademarks, service marks, trade names, copyrights,
technology, know-how or processes or confidential information or challenging or
questioning the validity or effectiveness of any such license or agreement, nor,
to the Knowledge of Company and the Shareholders, is there any basis for any
such claims. The perpetual use of such patents, trademarks, trade names, service
marks, copyrights, technology, know-how or processes, or confidential
information by Company does not infringe on the rights of any person or entity,
and, to the Knowledge of Company and the Shareholders, there is no infringing
use of Company's patents, trademarks, trade names, service marks or copyrights
by others.
(f) Schedule 2.4(f) attached hereto contains a list of all
written and oral agreements (other than the Leases) that either are not
terminable at will or may involve more than Ten Thousand Dollars ($10,000)
during the term thereof and to which Company is a party or by which Company or
any of Company's assets or properties are bound. Each such agreement is legally
binding and in full force and effect, and there is no existing or alleged
default or event of default under any such agreement, nor does there exist any
event or condition which, with notice or lapse of time or both, would constitute
such a default or event of default by Company. Copies of all documents listed in
Schedule 2.4(f) have been delivered to Purchaser and Bristol, and are true and
complete in all respects and include all amendments and supplements thereto and
modifications thereof.
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(g) Schedule 2.4(g) attached hereto contains a list of (i) every
bank, savings and loan or other financial institution in which Company has any
accounts or lock boxes and the corresponding account identification number, if
any; (ii) the names of the persons authorized to make withdrawals therefrom or
have access thereto; and (iii) each person who holds a power of attorney for
Company.
(h) Schedule 2.4(h) attached hereto contains a list of the ten
(10) largest customers of Company measured by the revenues from such customers
during the twelve (12) month period commencing April 1, 1996 and ending March
31, 1997, showing the approximate total xxxxxxxx by Company to each such
customer during such period. There has not been any materially adverse change in
the business relationship of Company with any customer named in Schedule 2.4(h).
Except for the customers named in Schedule 2.4(h), Company did not have any
customer who accounted for more than five percent (5%) of the aggregate sales or
services of Company during the twelve (12) month period commencing April 1, 1996
and ending March 31, 1997. No person or entity that was a customer of Company at
any time during the past twelve (12) months was at such time controlled by, in
control of or under common control with Company or the Shareholders.
(i) Schedule 2.4(i) attached hereto contains a list of the ten
(10) largest suppliers of the Company measured by payments to such suppliers
during the twelve (12) month period commencing April 1, 1996 and ending March
31, 1997. There has not been any materially adverse change in the business
relationship of Company with any supplier named in Schedule 2.4(i). Except as
set forth on Schedule 2.4(i), no person or entity that was a supplier of Company
at any time during the past twelve (12) months was at such time controlled by,
in control of or under common control with Company or the Shareholders.
(j) Schedule 2.4(j) attached hereto contains a list of insurance
policies in force currently or at any time during the past two (2) years and
relating to Company or its assets or properties, including in each instance the
name of the carrier, the term of the policy, the periods for which it has been
continuously in effect, the annual premium and the general scope of coverage.
Such insurance is and was sufficient in type to protect Company as it currently
conducts its business and as it has conducted its business during the past two
(2) years and the premiums for such insurance policies are fully paid. None of
the policies provides for the assessment of additional or retroactive premiums,
and there are no loans outstanding against any such policies. No notice of
cancellation or non-renewal with respect to, or disallowance of any claim under,
any insurance policy listed or required to be listed on Schedule 2.4(j) or
binder listed or required to be listed in Schedule 2.4(j) has been received by
Company. No claim or event that forms the basis of a claim has occurred which
could cause Company's insurers to substantially increase the cost of insurance
for Company.
(k) Except as set forth on Schedule 2.4(k) attached hereto, all
assets and properties purported to be owned by Company are owned free and clear
of all Encumbrances. Company rightfully possesses or has the right to use all
assets and properties necessary to conduct its business.
2.5 Legal Matters.
(a) Except as set forth on Schedule 2.5(a) attached hereto, there
is no action, suit, proceeding or investigation pending, or, to the Knowledge of
Company or the Shareholders, threatened, at law or in equity, before any
arbitrator or court or other governmental authority, nor any outstanding
judgment, decree, injunction, charge, award or order, against or in any manner
involving Company or any of Company's assets or properties, or the Company
Shares.
(b) Company has complied with all judgments, orders, rulings,
statutes, laws, permits, licenses, franchises, ordinances and other governmental
authorizations, approvals and regulations applicable to it or any of its
operations, properties or assets. Company has all licenses and permits and other
governmental authorizations and approvals required for the operation of its
business and the use of its assets and properties.
(c) Company has filed or caused to be filed all federal, state,
local and foreign income and other Tax Returns required under applicable law to
be filed on or before the Closing Date, Company has paid or made provision for
all Taxes and other charges which have or may become due for the periods covered
by such Tax Returns, all such Tax Returns are true, correct and complete in all
respects. None of the Tax Returns of Company are currently under investigation
or audit, nor to the Knowledge of Company or the Shareholders is an
investigation or audit pending, and there has not been an investigation or audit
of the Tax Returns of Company during the past seven (7) years. There are no
outstanding agreements or waivers extending the statutory period of limitations
applicable to any Tax Return for any period. The accounting treatment of all
items of income, gain, loss, deduction and credit as reported on all Tax Returns
and estimates filed by or on behalf of Company are true and
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complete, and all deferred Taxes and all Taxes due for the period ending on the
Closing Date have been accrued on the Balance Sheet of the most recent Financial
Statements through the date thereof. Company has never been, nor is Company
currently, a party to any agreement relating to the sharing of any liability
for, or payment of, Taxes with any third party. Schedule 2.5(c) attached hereto
(i) lists all federal, state, local and foreign income Tax Returns filed with
respect to Company for taxable periods ended on or after December 31, 1992; (ii)
indicates those Tax Returns that have been audited, if any; (iii) and indicates
those copies of all income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by Company since December 31, 1992.
No claim has ever been made by an authority in a jurisdiction where Company does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets of Company that
arose in connection with any failure (or alleged failure) to pay any Tax. All
Taxes owed by Company or which Company is obligated to withhold from amounts
owing to any employee, independent contractor, stockholder, creditor or third
party have been paid. There are no unresolved claims concerning Company's Tax
Liability, and no basis for any such claim exists.
(d) No solid, hazardous or toxic wastes, substances or materials,
as those terms are used in the Clean Air Act, Resource Conservation and Recovery
Act of 1976, as amended, the Hazardous Materials Transportation Act or the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986
(XXXX), or in any other federal, state or local law or ordinance governing
hazardous, toxic or solid wastes, materials or substances, and no asbestos,
polychlorinated biphenyls, urea formaldehyde foam, explosives, infectious or
biological wastes or radioactive materials (all of the above being collectively
referred to herein as "Hazardous Substances") have been or are unlawfully
stored, treated, disposed of, managed, generated, manufactured, produced,
released, emitted or discharged, in, on, under or about the Leased Premises by
Company so as to (i) require, under any applicable law or treaty, a governmental
approval, consent, waiver, exemption, variance, franchise, order, permit,
authorization, right or license (an "Approval"), unless such Approval has been
obtained and remains in full force and effect; or (ii) render the Leased
Premises in noncompliance with or in violation of any applicable law,
regulation, or permit or subject to any obligation, Liability, order or
requirements for remediation. No governmental or private action, suit or
proceeding concerning or arising out of the use, storage, treatment, discharge,
disposal, handling, manufacturing, processing, treatment, transportation,
release or threat of release of any Hazardous Substance at, under or in
connection with Company's business or the Leased Premises, or to enforce or
impose liability under environmental pollution laws, common law or laws relating
to the protection of worker and work place health and safety has been
instituted, initiated or, to the Knowledge of Company and the Shareholders,
threatened against or with respect to Company or the Shareholders or the Leased
Premises as a result of the Company's or the Shareholders' acts or omissions.
(e) Product Warranty. Each product manufactured, sold, or
delivered by Company has been in conformity with all applicable contractual
commitments and all express and implied warranties, and Company has no Liability
(and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability) for replacement or repair thereof or other damages
in connection therewith, subject only to the reserve for product warranty claims
set forth on the face of the balance sheet of the most recent Financial
Statements (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
Company. No product manufactured, sold, or delivered by Company is subject to
any guaranty, warranty, or other indemnity beyond the applicable standard terms
and conditions of sale. Schedule 2.5(e) includes copies of the standard terms
and conditions of sale for Company (containing applicable guaranty, warranty,
and indemnity provisions).
(f) Product Liability. Company has no Liability (and there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against Company giving rise
to any Liability) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product manufactured, sold,
or delivered by Company.
(g) Health and Safety. Company has received no notice of any
violation, nor, to the Knowledge of Company and the Shareholders, is there any
basis for any assertion of a violation by Company, of the Occupational Safety
and Health Act of 1970, as amended, together with all other laws (including
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings and changes thereunder) of federal, state and local governments (and all
agencies thereof) concerning public health and safety or employee health and
safety laws.
(h) Absence of Claims. The Shareholders have no claims against
the Company.
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2.6 Employment Matters
(a) None of Company's employees belongs to a labor union in
connection with his or her employment by Company nor has there been any request
by any employee to be represented by a union in such connection.
(b) Except as identified on Schedule 2.6(b) attached hereto, no
officer, manager or key employee of Company has indicated within the past twelve
(12) months that he or she may terminate his or her employment with Company
(regardless of whether such indication was formal or informal).
(c) Schedule 2.6(c) attached hereto sets forth the names of all
Company's directors and officers, and the names of all persons whose
compensation from Company during the current year will exceed Twenty-Five
Thousand Dollars ($25,000).
(d) Schedule 2.6(d) attached hereto contains a list of each
pension, retirement, profit-sharing, deferred compensation, bonus or other
incentive plan, employee program, arrangement, agreement or understanding,
medical, vision, dental or other health plan, life insurance plan, severance
plan or any other employee benefit plan to which Company or any entity under
common control with the Company contributes or is a party or is bound and under
which current or former employees of Company are eligible to participate or
derive a benefit.
(e) Company does not maintain, never has maintained or
contributed to, and has never been required to contribute to any Employee
Benefit Plan or has any Liability under any Employee Benefit Plan.
(f) Company does not contribute to, never has contributed to, and
has never been required to contribute to any multiemployer plan or has any
Liability (including withdrawal liability) under any multiemployer plan.
2.7 Continuity of Interest. The Shareholders have no present plan,
intention or arrangement to dispose of any of their Restricted Stock in a manner
that would cause the Merger to violate the continuity of shareholder interest
requirement set forth in Treasury Regulation Section 1.368-1.
2.8 Tax Free Reorganization. This Agreement and the transactions
contemplated herein qualify, in all respects, as a tax free reorganization
pursuant to Code Section 368(a)(2)(D).
2.9 Brokers. No broker, finder or investment banker has acted
directly or indirectly for Company or any of its officers or directors, or for
the Shareholders in connection with this Agreement or the transactions
contemplated hereby, and no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in respect thereof based in
any way on agreements, arrangements or understandings made by or on behalf of
Company or the Shareholders.
2.10 Disclosure. No representation or warranty by Company or the
Shareholders in this Agreement or in any other certificate or document delivered
to Purchaser and Bristol and their representatives contains any untrue statement
of a material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact which has not been
disclosed to Purchaser and/or Bristol which has had or is likely to have a
Materially Adverse Effect on Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Bristol and Purchaser each hereby, jointly and severally, represent
and warrant to, and agree with, Company and the Shareholders that (except for
changes contemplated by this Agreement), each of the following statements is
true, correct and complete as of the date of this Agreement and will be true
correct and complete as of the Closing Date (each such statement to be made
again by Bristol and the Purchaser on that date with the Closing Date being
substituted for the date of this Agreement throughout this Article 3):
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3.1 Organization and Authority.
(a) Purchaser and Bristol are corporations duly organized,
validly existing and in good standing under the laws of the State of Delaware,
have all requisite corporate power and authority to carry on their respective
businesses as currently conducted and to own or lease and operate their
respective properties, and are duly qualified to do business as foreign
corporations in each jurisdiction where their businesses make such qualification
necessary. Purchaser and Bristol have the requisite power to enter into this
Agreement and to carry out their respective obligations hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by Purchaser's and Bristol's respective Boards of Directors prior to the Closing
Date, and no other proceedings on the part of Purchaser or Bristol are necessary
to authorize this Agreement and the transactions contemplated hereby, and this
Agreement is a valid and binding obligation of Purchaser and Bristol enforceable
in accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(c) Except as set forth on Schedule 3.1(c)(1) attached hereto, no
consent, approval or authorization of, or declaration, filing or registration
with, any third party, including any government or regulatory authority, is
required in connection with the execution and delivery by Purchaser and Bristol
of this Agreement and the consummation by Purchaser and Bristol of the
transactions contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
conflict with, result in a breach of or constitute a default under any of the
terms, conditions or provisions of the Certificate of Incorporation or By-laws
of Purchaser or Bristol; (ii) violate any law, order, judgment or decree to
which any of Purchaser's or Bristol's properties or assets are bound; (iii)
violate or constitute a default under (whether after the giving of notice,
passage of time or both), or permit the termination of, or impair any rights or
increase any obligations of Purchaser or Bristol under, any agreement or
instrument to which Purchaser or Bristol is a party or by which any part of
Purchaser's or Bristol's properties or assets are bound; or (iv) result in the
acceleration of the maturity of any debt or obligation of Purchaser or Bristol,
or in the creation or imposition of any Encumbrance upon any of the properties
or assets of Purchaser or Bristol.
3.2 Brokers. No broker, finder or investment banker has acted
directly or indirectly for Purchaser or Bristol, or any of their officers or
directors in connection with this Agreement or the transactions contemplated
hereby, and no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of Purchaser or
Bristol.
3.3 Disclosure. No representation or warranty by Purchaser or Bristol
in this Agreement or in any other certificate or document delivered to Company
and the Shareholders and their representatives contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading.
3.4 Company Employees. Subject to Section 3(e) of Xxxxxx Xxxxxxx'x
Employment Agreement attached hereto as Exhibit "D," neither Bristol nor
Purchaser make any representation or warranty about the continued employment of
Company's employees by Surviving Corporation. To the extent Surviving
Corporation determines to employ any former Company employee, such employee
shall execute Surviving Corporation's standard employment agreement which shall
contain such terms and conditions as such employee and Surviving Corporation
negotiate. Neither Bristol nor Purchaser nor Surviving Corporation shall be
responsible for, obligated under or incur any Liability in connection with any
employment agreement or any bonus, insurance, pension, employee benefit
(including accrued vacation) or other compensation or benefit arrangement
between Company and any employee of Company.
3.5 Litigation. There are no pending or threatened administrative or
legal proceedings or investigations against either Purchaser or Bristol that, if
resolved against one or both of the companies, would adversely affect their
business in a material way, or could reasonably be expected to impair the
consummation of the Merger.
3.6 Financial Matters. There have been no material adverse changes in
the business of either Bristol or Purchaser or their financial conditions which
have not been disclosed to Company and the Shareholders. Bristol has delivered a
copy of its most recent quarterly financial statements to Shareholders, which
accurately represent its financial condition in all
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material respects, and there have been no material adverse changes, or
transactions which could be reasonably expected to adversely affect the
financial condition of Bristol, since the date of these financial statements.
ARTICLE IV
COVENANTS
4.1 General. Each of the parties hereto shall use its best efforts to
take all action and to do all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the conditions to close set forth in
Article 5, below).
4.2 Notices and Consents. Each of the parties will give all notices
to third parties and shall obtain prior to the Closing Date all third party
consents which are necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement. Company's obligations
to obtain third party consents shall include, but not be limited to (i) the
consents of all manufacturers under contract with Company to the assignment to
and assumption by Surviving Corporation of such contracts, without default,
modification or amendment thereof; and (ii) the consents of all lenders to which
the Company is indebted to the assignment to and assumption by Surviving
Corporation of such indebtedness, without default, acceleration, modification or
amendment thereof.
4.3 Regulatory Matters and Approvals. Each of the parties shall give
all notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Sections 2.1(e) and 3.1(c), above,
or elsewhere in this Agreement.
4.4 Continuity of Interest. The Shareholders shall not dispose of any
of the Restricted Stock in a manner that would cause the Merger to violate the
continuity of shareholder interest requirement set forth in Treasury Regulation
Section 1.368-1. If the Shareholders desire to dispose of any of the Restricted
Stock, then they shall provide written notice to Bristol, not less than sixty
(60) days prior to the intended date of disposition, specifying the number of
Restricted Stock that such Shareholder desires to dispose.
4.5 Continuity of Business. Surviving Corporation shall continue at
least one significant historical business line of Company, or use at least a
significant portion of Company's historical business assets in a business, in
each case in accordance with Treasury Regulation Section 1.368-1(d).
4.6 Tax Free Reorganization. The parties intend the Merger to be a
tax-free reorganization pursuant to Code Section 368(a)(2)(D), and each agrees
to indemnify each other party for any loss or damage occasioned by a breach of
this Agreement by the indemnifying party which causes or contributes to the
imposition of any Tax Liability against any other party hereto.
4.7 Listing of Restricted Stock and Additional Restricted Shares. The
Restricted Stock and the Additional Restricted Shares issued to the Shareholders
pursuant to Sections 1.4 and 1.5, above, shall remain restricted for a period of
two (2) years from the Closing Date. Not later than thirty (30) days prior to
the second anniversary of the Closing Date, Bristol shall apply to have the
Shareholders' Restricted Stock and Additional Restricted Shares approved for
inclusion on such stock exchange as Bristol's publicly traded Common Stock is
then listed, if any. The parties expressly understand and agree that such
application shall only be made if (i) Bristol's publicly traded Common Stock is
then listed on a stock exchange; and (ii) such application is necessary to
include the Shareholders' Restricted Stock and Additional Restricted Shares
thereon.
4.8 Operation of Business. From the date of this Agreement through
the Closing Date, Company shall not engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing:
(a) Company shall not authorize or effect any change in its
Articles of Incorporation or By-laws;
(b) Company shall not grant any options, warrants, or other
rights to purchase or obtain any of its capital stock or issue, sell, or
otherwise dispose of any of its capital stock;
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(c) Company shall not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in kind), or
redeem, purchase, or otherwise acquire any of its capital stock;
(d) Company shall not issue any note, bond or other debt security
or create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation;
(e) Company shall not impose, or allow to be imposed, any
Encumbrance upon any of its assets;
(f) Company shall not make any capital investment in, make any
loan to, or acquire the securities or assets of any person or entity;
(g) Company shall not make any change in the terms and conditions
of employment for any of its directors, officers, and employees; and
(h) Company shall not commit to do any of the foregoing.
From the date of this Agreement through the Closing Date, neither
Bristol nor Purchaser shall do any act which would result in a substantial
dilution of the outstanding capital stock of Bristol.
4.9 Company Employees. Company shall terminate all of its agreements
with its employees (including all employment agreements and all bonus,
insurance, pension, benefit, and other compensation or benefit plans or
agreements) on or prior to the Effective Time; provided, however, that such
employees shall be re-employed by Surviving Corporation on substantially similar
terms as those provided to such employees by Company. In addition, any
post-Closing termination of or change in the terms of employment for personnel
of Surviving Corporation is expressly subject to the terms and conditions of
Section 3(e) of Xxxxxx Xxxxxxx'x Employment Agreement attached hereto as Exhibit
"D."
4.10 Full Access. Company, Bristol and Purchaser shall permit each
other's representatives to have full access to all personnel, premises,
properties, books, records (including tax records), accounts, contracts, and
documents of or pertaining to each respective company. The parties shall treat
and hold as such any Confidential Information they receive from each other in
the course of the due diligence investigation contemplated by this section 4.10,
shall not use any of the Confidential Information except in connection with the
transactions contemplated by this Agreement, and, if this Agreement is
terminated for any reason whatsoever, shall return to each other all tangible
embodiments (and all copies) thereof which are in their possession.
4.11 Notice of Developments. Each party hereto shall give prompt
written notice to the other of any material adverse development causing a breach
of any of its own representations and warranties in Articles 2 and 3, above, or
the breach of any of its own covenants in this Article 4. No disclosure by any
party pursuant to this Section 4.11, however, shall be deemed to amend or
supplement the Schedules hereto or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
4.12 Exclusivity. Company shall not solicit, initiate, or encourage
the submission of any proposal or offer from any person or entity relating to
the acquisition of all or substantially all of the capital stock or assets of
Company.
4.13 Barzgar Loan Agreement. Prior to the Closing Date, Company shall
pay in full the indebtedness owed Xxxxxx Xxxxxxx under that certain Loan
Agreement, dated May 17, 1994, and, upon such payment, Xx. Xxxxxxx shall release
his liens covering the two Company vehicles described in such agreement. The
above-described Loan Agreement is attached hereto as Exhibit "E."
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ARTICLE V
CONDITIONS TO CLOSE
5.1 Conditions to Obligations of Bristol and Purchaser to Close. The
obligations of Bristol and Purchaser to consummate the transactions to be
performed by them on or prior to the Closing Date are subject to the
satisfaction of the following conditions:
(a) This Agreement and the Merger shall have been approved by the
Board of Directors and the shareholders of Bristol, Purchaser and Company;
(b) The representations and warranties set forth in Article 2,
above, shall be true and correct in all material respects on and as of the
Closing Date;
(c) Company and the Shareholders shall have performed and
complied with all of their covenants hereunder in all material respects through
the Closing Date;
(d) Company shall have obtained all third party consents that are
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including, but not limited to, the consents
specifically set forth in Section 4.2, above;
(e) Company and the Shareholders shall have made their respective
delivery obligations in accordance with the terms and conditions of Article 6,
below;
(f) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement;
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation; or (iii) affect adversely the right of
Surviving Corporation to own the former assets and to operate the former
businesses of Company, and no such injunction, judgment, order, decree, ruling
or charge shall be in effect;
(g) Company shall have completed and delivered the Schedules to
this Agreement and the information contained in such Schedules shall be
satisfactory to Purchaser and Bristol in their absolute and sole discretion;
(h) Bristol and Purchaser shall have completed their due
diligence investigation of Company and shall be satisfied with the results of
such investigation in their reasonable discretion, including, but not limited
to, the confirmation by representatives of Bristol and Purchaser of Company's
Net Worth, as stated on the Company's May 31, 1997 balance sheet;
(i) Bristol shall have determined in its reasonable discretion
that an audit of Company is not required in order to comply with the rules and
regulations promulgated by the Securities Exchange Commission.
(j) All actions to be taken by Company and the Shareholders in
connection with the consummation of the transactions contemplated herein and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated herein shall be satisfactory in form and substance to
Bristol and Purchaser in their absolute and sole discretion.
Bristol and Purchaser may waive any condition specified in this
Section 5.1 if they execute a writing so stating on or prior to the Closing
Date.
5.2 Conditions to Obligations of Company and the Shareholders to
Close. The obligations of Company and the Shareholders to consummate the
transactions to be performed by them on or prior to the Closing Date are subject
to satisfaction of the following conditions:
(a) The representations and warranties set forth in Article 3,
above, shall be true and correct in all material respects on and as of the
Closing Date;
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(b) Bristol and Purchaser shall have performed and complied with
all of their covenants hereunder in all material respects through the Closing
Date;
(c) Bristol and Purchaser shall have made their respective
delivery obligations set forth in Article 6, below;
(d) There shall not be any injunction, judgment, order, decree,
ruling or charge in effect against Bristol or Purchaser preventing the
consummation of any of the transactions contemplated by this Agreement; and
(e) All actions to be taken by Bristol and Purchaser in
connection with the consummation of the transactions contemplated by this
Agreement and all certificates, instruments, and other documents required to
effect the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to Company and the Shareholders.
(f) Company and the Shareholders will have completed their due
diligence and be satisfied as to Purchaser's and Bristol's status, in their
reasonable discretion.
Company and Shareholder may waive any condition in this Section 5.2
if they execute a writing so stating on or prior to the Closing Date.
ARTICLE VI
DELIVERIES ON OR PRIOR TO THE CLOSING DATE
6.1 Deliveries Subject to Filing of Certificates. All deliveries to
be made pursuant to this Article 6 shall, to the extent appropriate, be prepared
in such a manner so as to become effective only upon the filing of the
Certificates in accordance with Section 1.1, above.
6.2 Mutual Deliveries. On or prior to the Closing Date, (i) Purchaser
and Xxxxxx Xxxxxxx shall deliver to each other the Employment Agreement with
Surviving Corporation in substantially the form set forth as Exhibit "D"
attached hereto; and (ii) Purchaser and Company shall deliver to each other the
Certificates in the forms of Exhibits "A" and "B" hereto.
6.3 Deliveries by Company. Not less than ten (10) days prior to the
Closing Date, the Shareholders shall cause Company to deliver to Purchaser and
Bristol the Schedules to this Agreement. On or prior to the Closing Date, the
Shareholders shall cause Company to deliver to Purchaser and Bristol (i) a
certificate stating that the representations and warranties of Company contained
in this Agreement are true and correct on and as of the Closing Date as though
made at and as of that date (except where such representation and warranty is
made as of a date specifically set forth therein); (ii) a copy of the
Certificate of Incorporation, as amended, and By-laws of Company as then in
effect, an incumbency certificate, and resolutions of the Board of Directors and
shareholders of Company approving the Agreement and authorizing the performance
of the transactions contemplated hereby, all as certified by the Secretary of
Company; (iii) a long-form good standing certificate dated as of or within
fifteen (15) business days of the Closing Date from the Secretary of State of
the State of California; (iv) the legal opinion of Company's counsel in the form
attached hereto as Exhibit "F"; (v) the resignations, effective as of the
Closing Date, of each director and officer of Company; and (vi) such other
documents as Purchaser may reasonably request for the purposes of consummating
the transactions contemplated hereby.
6.4 Deliveries by the Shareholders. On or prior to the Closing Date,
the Shareholders shall deliver to Bristol and Purchaser (i) the certificate(s)
representing all of the Company Shares owned by the Shareholders, duly endorsed
for surrender and cancellation; (ii) a certificate stating that the
representations and warranties of the Shareholders contained in this Agreement
are true and correct on and as of the Closing Date as though made at and as of
that date (except where such representation and warranty is made as of a date
specifically set forth therein); (iii) their resignations as directors and
officers of Company; (iv) the promissory note issued to Xxxxxx Xxxxxxx, which
note shall be cancelled upon payment by the Purchaser to Xx. Xxxxxxx of the
amounts described in Section 1.4.1(d); and (v) such other documents as Purchaser
may reasonably request for the purposes of consummating the transactions
contemplated herein.
6.5 Deliveries by Bristol. On or prior to the Closing Date, Bristol
shall deliver to the Shareholders (i) a certificate stating that the
representations and warranties of Bristol contained in this Agreement are true
and correct on and as of
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the Closing Date as though made at and as of that date (except where such
representation and warranty is made as of a date specifically set forth
therein); (ii) a copy of the Certificate of Incorporation, as amended, and
By-laws of Bristol as then in effect, and resolutions of the Board of Directors
of Bristol approving the Agreement and authorizing the performance of the
transactions contemplated herein, all as certified by the Secretary of Bristol ;
(iii) a long-form good standing certificate dated as of or within fifteen (15)
business days of the Effective Date from the Secretary of State of the State of
Delaware; and (iv) such other documents as the Shareholders may reasonably
request for the purposes of consummating the transactions contemplated hereby.
As soon as practicable following the Closing Date, Bristol shall deliver to (i)
the Shareholders a total of Ninety-One Thousand Two Hundred Fifty Dollars
($91,250) worth of Restricted Stock; (ii) Xxxxxx Xxxxxxx Fifty-Eight Thousand
Seven Hundred Fifty Dollars ($58,750) worth of the Additional Restricted Shares;
and (iii) the Escrow Agent Seventy-Five Thousand Dollars ($75,000) worth of
Restricted Stock.
6.6 Deliveries by Purchaser. On or prior to the Closing Date,
Purchaser shall deliver to the Shareholders (i) a copy of the resolutions of the
Board of Directors of Purchaser approving the Agreement and authorizing the
performance of the transactions contemplated hereby, all as certified by the
Secretary of Purchaser; and (ii) such other documents as the Shareholders may
reasonably request for the purposes of consummating the transactions
contemplated herein. Immediately after the effective Time and on the Closing
Date, Purchaser shall deliver to (i) the Shareholders a total of One Hundred
Fifty Thousand Dollars ($150,000) in immediately available funds; and (ii)
Xxxxxx Xxxxxxx Two Thousand Three Hundred Twenty-Four Dollars ($2,324).
6.7 Waivers. A party may waive any deliveries to which it is entitled
pursuant to this Article 6 if it executes a writing so stating on or before the
Closing Date.
ARTICLE VII
INDEMNITIES
7.1 Indemnity by Bristol.
(a) Bristol hereby expressly and unequivocally agrees to
indemnify, defend and hold harmless the Shareholders from and against and in
respect of any and all claims, demands, losses, costs, expenses, obligations,
guaranties, liabilities, actions, suits, damages and deficiencies, including
without limitation, interest, penalties, reasonable attorneys' fees and all
amounts paid in settlement of any claim, action or suit (all such claims,
demands, losses, costs, expenses, etc. being referred to herein collectively as
"Claims") which are asserted against the Shareholders or which the Shareholders
incur or suffer, whether as a result of third party claims or otherwise, and
which arise out of, result from or relate to (i) any failure by Bristol and
Purchaser to fully perform in a timely manner any agreement, covenant or
obligation of Bristol and Purchaser hereunder, or (ii) the existence or
non-existence of any fact or circumstance which is different from or
inconsistent with or a breach of any representation or warranty of Bristol made
herein, provided, however, that any insurance proceeds payable to the
Shareholders with respect to any indemnification claim hereunder shall reduce
Bristol's indemnification obligations, dollar for dollar.
(b) The indemnities provided for above shall not require payment
as a condition precedent to recovery.
7.2 Indemnity by Company and the Shareholders.
(a) The Company and the Shareholders hereby expressly and
unequivocally agree to indemnify, defend and hold harmless Bristol, Purchaser
and Surviving Corporation, and Bristol's, Purchaser's and Surviving
Corporation's officers, directors, employees, agents, affiliates, attorneys,
representatives and related entities (for purposes of this Section 7.2 only, the
"Indemnified Parties") from and against and in respect of any and all Claims
which are asserted against any Indemnified Party or which any Indemnified Party
incurs or suffers, whether as a result of third party claims or otherwise, and
which arise out of, result from or relate to (i) any failure by Company and/or
the Shareholders to fully perform in a timely manner any agreement, covenant or
obligation of Company and/or the Shareholders hereunder; (ii) the existence or
non-existence of any act or circumstance which is different from or inconsistent
with or a breach of any representation or warranty of Company and/or the
Shareholders made herein; or (iii) the acts, omissions, statements,
misstatements or other business, properties and affairs of Company and the
Shareholders; provided, however, that any insurance proceeds payable to Bristol,
Purchaser or Surviving Corporation with respect to any indemnification claim
hereunder shall reduce Company's and the Shareholders' indemnification
obligations, dollar for dollar.
(b) The indemnities provided for above shall not require payment
as a condition precedent to recovery.
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7.3 Defense of Claims. If any party receives notice of the
commencement of any action or of the existence of any Claim or a written
assertion of any facts by a third party with respect to any matter that would
give rise to a Claim hereunder or otherwise suffers a loss for which such party
is entitled to be indemnified pursuant to Section 7.1 or Section 7.2, above,
then that party (the "Indemnified Party") shall give the party required to
indemnify (the "Indemnifying Party") reasonable notice thereof and shall permit
the Indemnifying Party to have reasonable access to relevant information in the
Indemnified Party's possession or control regarding such Claim. The Indemnifying
Party shall have the right to take all reasonable action, at its own expense, as
it deems desirable in order to minimize or eliminate such Claim. In the event of
a Claim requesting solely monetary damages, the Indemnifying Party shall have
the right, at its own expense, to appoint counsel to handle the defense of such
matter and the exclusive right to prosecute, defend, compromise, settle or pay
such Claim provided that the Indemnifying Party acknowledges in writing its
obligations and Liability for such Claim as between the parties hereto or
procures from the person making the Claim a full and complete release of the
Indemnified Parties which is satisfactory in form and substance to counsel for
the Indemnified Parties. If the foregoing acknowledgments or releases are not
furnished to the Indemnified Party, then they may appoint associate counsel to
participate in the defense of such matter at the expense of the Indemnifying
Party. If the person asserting the Claim requests relief other than or in
addition to monetary damages, then the Indemnifying Party may not settle any
aspects of such Claim requesting relief other than monetary damages without the
Indemnified Parties' prior written consent, which consent shall be subject only
to their obligation to act in good faith.
7.4 Remedies Not Exclusive. The remedies provided in this Article 7
shall be in addition to, and not in lieu of, any other remedies which a party
may have at law, in equity or otherwise.
ARTICLE VIII
TERMINATION
8.1 Termination of Agreement. This Agreement and the transactions
contemplated herein may be terminated as follows:
(a) By the mutual written consent of the parties hereto at any
time prior to the Effective Time;
(b) By Bristol and/or Purchaser by giving oral or written notice
to Company and the Shareholders at any time prior to the Effective Time (i) in
the event Company or the Shareholders have breached any material representation,
warranty, or covenant contained in this Agreement in a material respect; or (ii)
in the event of the failure of a condition to close set forth in Section 5.1,
above; and
(c) By Company and/or the Shareholders by giving oral or written
notice to Bristol and Purchaser at any time prior to the Effective Time (i) in
the event Bristol and/or Purchaser has breached any material representation,
warranty, covenant contained in this Agreement in any material respect; or (ii)
in the event of the failure of a condition set forth in Section 5.2, above.
8.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 8.1, above, then all rights and obligations of the parties
hereto shall terminate without any Liability of any party to any other party
(except for any Liability of any party then in breach); provided, however, that
the confidentially provisions contained in Section 4.10, above, shall survive
any such termination.
ARTICLE IX
GENERAL PROVISIONS
9.1 Publicity. After the Effective Time and except as may otherwise
be required by law (i) Bristol shall determine the timing and content of any
press release or public announcement relating to the transactions contemplated
by this Agreement; and (ii) Bristol, Surviving Corporation and Xxxxxx Xxxxxxx
shall determine the timing and content of any announcements to Company's
customers, suppliers, licensors, licensees or employees relating to the
transactions contemplated by this Agreement and no such announcement shall be
made without the prior written consent of such parties.
9.2 Complete Agreement; Modifications. This Agreement and any
documents referred to herein or executed in connection herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all
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agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may not be amended, altered or modified except by a
writing signed by the parties.
9.3 Additional Documents. Each party hereto agrees to execute,
acknowledge and deliver any and all further documents, instruments,
certificates, agreements and other writings and to perform such other actions,
which may be or become necessary or expedient to effectuate and carry out this
Agreement.
9.4 Notices. Unless otherwise specifically permitted by this
Agreement, all notices under this Agreement shall be in writing and shall be
delivered by personal service, telecopy, federal express or comparable overnight
service or certified mail (if such service is not available, then by first class
mail), postage prepaid, to such address as may be designated from time to time
by the relevant party. Any notice sent by certified mail shall be deemed to have
been given three (3) days after the date on which it is mailed. All other
notices shall be deemed given when received. No objection may be made to the
manner of delivery of any notice actually received in writing by an authorized
agent of a party. The initial addresses of the parties shall be as follows:
If to Bristol: With a copy to:
Bristol Technology Systems, Inc. Xxxx X. Xxxxx, Esq.
0000 Xxxxx Xxxxxx, Xxxxx 000 Stradling, Yocca, Xxxxxxx & Xxxxx
Xxxxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
If to Purchaser: With a copy to:
Pacific Merger Corp. Xxxx X. Xxxxx, Esq.
0000 Xxxxx Xxxxxx, Xxxxx 000 [Same as above]
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Shareholders: With a copy to:
Xxxxxx Xxxxxxx Xxxxx X. Xxxxxxx, Xx.
000 Xxxxx Xxxxxx 0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Xxxxxx Xxxxxxx
c/o Caspian & Associates
#0 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: ( ) -
--- ---- ------
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If to Company: With a copy to:
Pacific Cash Register and Xxxxx X. Xxxxxxx, Xx.
Computer, Inc. [Same as above]
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
9.5 No Third Persons or Entities. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any third person or
entity; provided, however, that Bristol shall be a third party beneficiary of
all rights of Purchaser and Surviving Corporation hereunder.
9.6 Governing Law; Jurisdiction. This Agreement, the respective
rights, obligations and remedies of the parties hereunder, the interpretation
hereof and all disputes, controversies and Liabilities arising out of or related
to this Agreement or the relationship between the parties created hereby shall
be governed by and construed in accordance with the internal laws of the State
of California without reference to its principles of conflict of laws.
9.7 Attorneys' Fees. Should any litigation or arbitration be
commenced (including any proceedings in a bankruptcy court) between the parties
hereto or their representatives concerning any provision of this Agreement or
the rights and duties of any person or entity hereunder, the party or parties
prevailing in such proceeding shall be entitled, in addition to such other
relief as may be granted, to the reasonable attorneys' fees and court costs
incurred by reason of or in connection with such litigation or arbitration.
9.8 Post-Judgment Attorneys' Fees. The prevailing party in any legal
action or other proceeding between the parties regarding this Agreement or the
subject matter hereof shall be entitled, in addition to and separately from the
amounts recoverable under Section 9.7, to the payment by the losing party of the
prevailing party's reasonable attorneys' fees, court costs, and litigation
expenses incurred in connection with (i) any appellate review of the judgment
rendered in such action or of any other ruling in such action; and (ii) any
proceeding to enforce, collect or execute upon a judgment in such action. It is
the intent of the parties that the provisions of this Section 9.8 be distinct
and severable from the other rights of the parties under this Agreement, shall
survive the entry of judgment in any action and shall not be merged into such
judgment.
9.9 Successors and Assigns. Neither this Agreement nor any rights or
obligations hereunder may be assigned, transferred or delegated by operation of
law or otherwise, without the prior written consent of the other parties hereto.
Subject to the above, this Agreement shall inure to the benefit of the parties'
respective successors and assigns.
9.10 Survival of Warranties. Each representation and warranty
contained herein shall survive the Closing Date for a period of three (3) years
following the Closing Date. The right to indemnification pursuant to this
Agreement shall survive any investigation made by the parties or their
representatives, lenders or investors, or the receipt of any opinion or
certificate.
9.11 Joint and Several Liability. Notwithstanding any provision of
this Agreement to the contrary, the Liability of Company and the Shareholders
arising prior to the Effective Time for the representations and warranties made
by, and the covenants and indemnification obligations imposed upon Company and
the Shareholders or any of them under this Agreement shall be joint and several.
The Liability of Company shall terminate at the Effective Time and the Liability
of the Shareholders shall remain joint and several.
9.12 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy will be cumulative and will be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies will
not constitute a waiver of the right to pursue other available remedies.
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9.13 Expenses. Each party shall pay all of the costs and expenses
incurred by such party in connection with the authorization, preparation,
execution and performance of this Agreement, including, without limitation, all
fees and expenses of its agents, representatives, counsel and accountants.
9.14 Waivers Strictly Construed. With regard to any power, remedy or
right provided herein or otherwise available to any party hereunder (i) no
waiver or extension of time shall be effective unless expressly contained in a
writing signed by the waiving party; and (ii) no alteration, modification or
impairment shall be implied by reason of any previous waiver, extension of time,
delay or omission in exercise, or by any other indulgence.
9.15 Rules of Construction. The Article and Section headings in this
Agreement are inserted only as a matter of convenience, and in no way define,
limit, or interpret the scope of this Agreement or of any particular Article or
Section. Throughout this Agreement, as the context may require, the singular
tense and number includes the plural, and the plural tense and number includes
the singular. The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the content requires otherwise. The word "including" shall
mean including without limitation. The parties intend that each representation,
warranty, or covenant contained herein shall have independent significance.
9.16 Severability. If any provision, clause or application of this
Agreement is determined by a court of competent jurisdiction or arbitrator to be
invalid or unenforceable for any reason whatsoever, (i) this Agreement shall
remain binding and in full force and effect to the maximum extent permitted
under applicable law, except for such invalidated or unenforceable provision,
clause or application; (ii) the parties shall negotiate in good faith to provide
adjustments to ameliorate any injustice or frustration of purpose resulting
therefrom in a manner consistent with the original intent of the parties; and
(iii) if the parties are unable to agree upon such adjustments, then the invalid
or unenforceable provision, clause or application shall be modified and reformed
by such court or arbitrator so that it is valid and enforceable in a manner that
comes the closest to expressing the original intention of the parties with
respect thereto, and each party hereto agrees to be bound by any such
modification and reformation with the same force and effect as if such
modification and reformation were contained in this Agreement in the first
instance.
9.17 Funds. Any requirement in this Agreement to pay immediately
available funds may be satisfied by delivery of a certified or cashier's check
in the applicable amount or by wiring to an account designated by the recipient
the applicable amount.
9.18 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are hereby incorporated in and made a part of this Agreement as if fully
set forth herein.
9.19 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
set forth above.
"BRISTOL" "PURCHASER"
BRISTOL TECHNOLOGY SYSTEMS, PACIFIC MERGER CORP., a Delaware
a Delaware corporation corporation
By: By:
------------------------------ -----------------------------------
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxx, President
"COMPANY" "SHAREHOLDERS"
PACIFIC CASH REGISTER AND
COMPUTER, INC., a California
corporation
-----------------------------
Xxxxxx Xxxxxxx
By:
----------------------------------
Xxxxxx Xxxxxxx, ------------------------------
President Xxxxxx Xxxxxxx
All cash paid and Restricted Shares delivered to the Shareholders
pursuant to Sections 1.4 and 1.5 shall be allocated among the Shareholders
pro-rata in accordance with their respective ownership of the Company Shares.
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