EXHIBIT 2.11
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 12th day of November, 1997, among DATATAPE INCORPORATED, a
Delaware corporation ("Seller"), DELTA TANGO, INC., a Nevada corporation
("Delta"), METRUM-D, INC., a Delaware corporation ("Buyer"), IMPACTDATA, INC., a
California corporation ("Impactdata"), and M. XXXXXX XXXXXX, an individual
("Xxxxxx"), as to Impactdata and Xxxxxx, for the limited purpose of Section 6.C
hereof.
RECITALS:
A. Seller is engaged in the "Business" (as hereinafter defined);
B. Delta owns all of the issued and outstanding shares of stock of
Seller and Delta desires to cause Seller to enter into this Agreement;
C. Seller desires to sell, transfer and assign to Buyer, and Buyer
desires to purchase and acquire from Seller, on the terms and subject to the
conditions set forth in this Agreement, substantially all of the assets used or
useful in the conduct of the Business; and
D. In conjunction therewith, Seller and Buyer desire to (i) take
other necessary actions so as to transfer to Buyer substantially all of the
assets used in the Business; and (ii) enter into agreements which would provide
Buyer with the use of certain intellectual property, all as more particularly
set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, and intending to be legally
bound, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms
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shall have the following meanings:
"Business" shall mean the business in which Seller is engaged on the
Closing Date, as described in Schedule 1.A.1 hereto, at the locations listed in
Schedule 1.A.2 hereto.
"Closing Date" shall mean November 14, 1997.
"Copy Rights" shall mean all published and unpublished rights in works
of authorship including, without limitation, (1) literary works, including
books, periodicals, catalogs, directories, textual advertising such as
brochures, pamphlets and other literature, tabular lists, lectures, manuals and
computer programs and data bases; (2) pictorial, graphic and sculptural works,
including maps, architectural plans and renderings, blue prints, photographs,
prints and pictorial illustrations such as labels and pictorial advertising,
posters, brochures and pamphlets, and pattern designs; (3) audiovisual works;
(4) sound recordings; and (5) mask works, and all U.S. and foreign pending and
issued copyright or mask work registrations thereon, including, but not limited
to, those items set forth on Schedule 1.A.3. hereto.
"Intellectual Property Rights" shall mean the Patent Rights, Copy
Rights, Trademarks and Trade Secrets as more fully described herein and other
similar rights in technology that are owned, used or controlled by Seller on the
Closing Date and used in, held by or useful in the Business.
"Know-How" shall mean all proprietary and non-proprietary know-how and
information used in or useful to the Business on the Closing Date including,
without limitation, (1) design drawings; (2) specifications and performance
criteria; (3) operating instructions and maintenance manuals; (4) manufacturing
information, including production documentation, methods, layouts and supplier
and cost information; (5) copies of on-site computer software and related
documentation, including, without limitation, available source and object code
listings; (6)
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prototypes, models or samples; (7) computer-aided design or computer-aided
manufacturing data; (8) information communicated to Seller in meetings or
conferences; (9) files relating to applications for Intellectual Property
Rights; and (10) all files relating to customers and other tangible materials
that are used in or useful to the Business on the Closing Date.
"Patent Rights" shall mean all (1) rights to inventions conceived on
or before the Closing Date by employees of Seller who are engaged in the
operation of the Business; (2) pending U.S. and foreign patent applications
owned by Seller and made on behalf of the Business; and (3) U.S. and foreign
patents owned by Seller, or for which Seller has the right to apply for as of
the Closing Date, which are or would be used by Seller in conducting the
Business, including, but not limited to, those items set forth in Schedule
1.A.4. hereto.
"Trademarks" shall mean trade names, trademarks, service marks, trade
dress and product configurations that are used or intended to be used by Seller
to identify the Business or any part thereof and all (1) goodwill and associated
common law rights; (2) registration applications pending thereon in any
province, state or country; and (3) registrations issued thereon, including, but
not limited to, those items set forth on Schedule 1.A.5. hereto.
"Trade Secrets" shall mean all proprietary information that is used
in, held by or useful to Seller for use in the Business and that (1) derives
independent economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by, third parties who can obtain
economic value from its disclosure or use and (2) is the subject of efforts by
Seller that were reasonable under the circumstances to maintain its secrecy,
such as, without limitation, proprietary specifications, formulas, drawings,
models, blue prints, software, production techniques and processes, retail and
wholesale customer lists, vendor lists, compilations, merchandising information,
cost and pricing information, business systems and methods and information
regarding future business opportunities.
2. Sale of Assets and Assumption of Certain Liabilities.
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A. Assets Sold and Retained.
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1. Assets Sold and Purchased. At the Closing Seller agrees
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to sell, transfer, convey, assign and deliver to Buyer and Buyer agrees to
purchase and acquire, according to the terms and conditions of this
Agreement, all of Seller's right, title, and interest in and to the
following assets and properties of, or assets and properties used, held by
or useful in the operation of, the Business on the Closing Date, other than
the assets identified in Section 2.A.2 hereof (collectively, the "Purchased
Assets"):
a. all personal property and vehicle leases listed on
Schedule 2.A.1.a hereto (the "Personal Property Leases") and all real
property leases listed on Schedule 2.A.1.a hereto (the "Real Property
Leases");
b. all contracts other than those referred to in Section
2.A.1.a in respect of the Business (other than a contract which is a
Benefit Plan as defined in Section 4.K.1), including, without
limitation, customer contracts, distributor agreements, agency
agreements, royalty and license agreements and rights, purchase
agreements, rights to use technology owned by others and all other
agreements of whatever nature used by or affecting the Business, all
as listed on Schedule 2.A.1.b hereto (collectively, the "Contracts");
c. all letters of credit in favor of Sellers related to
the Business and all prepaid expenses and deposits of the Business,
all as preliminarily listed on Schedule 2.A.1.c hereto, which Schedule
will be updated upon preparation of the Closing Balance Sheet
(hereinafter defined);
d. all accounts receivable of the Business or other
rights to receive payment for services performed as of the Closing
Date including, without limitation, the accounts receivable that are
preliminarily
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identified on Schedule 2.A.1.d hereto, which Schedule will be updated
upon preparation of the Closing Balance Sheet;
e. all inventory of the Business, including, but not
limited to, supplies, raw materials, component parts, work-in-progress
and finished goods on hand, including, without limitation, the
inventory preliminarily listed on Schedule 2.A.1.e hereto, which
Schedule will be updated upon preparation of the Closing Balance Sheet
(the "Inventory"), except for items owned by customers of the Business
incorporated into inventory of Seller, jigs and similar items owned by
customers of the Business and those raw materials or components which
have been consigned to the Business by its customers, which shall be
transferred to Buyer subject to the terms of the consignment
arrangements as identified and described in Schedules 2.A.1.e and
2.A.1.f;
f. all machinery, equipment, dies, tooling, tooling
fixtures, spare parts, fittings, office furniture, fixtures, supplies
and other tangible personal property used in the Business at its
various locations, including, without limitation, the equipment
preliminarily identified on Schedule 2.A.1.f hereto, which Schedule
will be updated upon preparation of the Closing Balance Sheet (the
"Fixed Assets"), except that certain equipment which has been
consigned to the Business by its customers which shall be transferred
to Buyer subject to the terms of the consignment arrangements as
identified and described in Schedule 2.A.1.f;
g. all on-site computer hardware and software owned by
Sellers and used in the Business at its various locations (the
"Computer Hardware and Software");
h. all goodwill of the Business;
i. the Know-How;
j. the Intellectual Property Rights and all business
names and other intangible assets relating to the Business set forth
on Schedule 2.A.1.j attached hereto;
k. all operating data, books and records of Seller
relating to the Business, including customer lists and information
relating to customers and suppliers with respect to the Business;
l. to the extent permitted by law all licenses,
certificates, permits, and other governmental authorizations relating
to the Business, including, but not limited to, those set forth on
Schedule 2.A.1.l attached hereto (the "Licenses and Permits");
m. all of Sellers' right, title and interest in and to
the proceeds of sales from the Business (but not including the
Purchase Price) which are received by Seller (i) on or after the close
of business on the day immediately preceding the Closing Date (5:00
p.m. pacific standard time) or (ii) prior to such time in excess of
the amount to be retained by Seller pursuant to Section 2.A.2 below,
in cash or cash equivalents, in lock boxes previously used for this
purpose and/or which are received in any other manner, the payment to
Buyer of which shall be sent, by electronic funds transfer to a bank
of Buyer's choice as soon as reasonably possible after clearance by
Seller's banks, as more fully set forth in the Transition Services
Agreement (as hereinafter defined); and
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n. all other assets, whether tangible or intangible,
which are used in, held by or are useful to the Business at its
various locations except as specifically excluded by Section 2.A.2
(the "Other Assets").
2. Assets Retained. The parties to this Agreement expressly
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understand and agree that notwithstanding the provisions of Section 2.A.1,
Seller is not hereunder selling, assigning, transferring or conveying to
Buyer the following assets, which shall be specifically excluded from the
transactions contemplated by this Agreement (the "Excluded Assets"):
a. all cash and cash equivalents up to $300,000 before
the close of business on the day immediately preceding the Closing
Date, whether held in lock boxes or otherwise;
b. any vehicles leased by Seller except those identified
on Schedule 2.A.1.a hereto;
c. all assets that are used exclusively in the conduct
of the business of Spin Physics and/or Impactdata as identified on
Schedule 2.A.2.c hereto;
d. any inter-company accounts receivable of Seller and
Delta;
e. certain other miscellaneous assets as identified on
Schedule 2.A.2.e hereto;
f. any Benefit Plan or any other contract or arrangement
providing employee benefits to employees;
g. the shares of Datatape International, Inc.;
h. the shares of Spin Physics, Inc.;
i. all of Seller's claims, causes of action, choses in
action, rights of recovery and rights to refunds relating to periods
prior to the Closing Time to the extent not related to the Purchased
Assets;
j. all of Seller's tax and information returns; all
correspondence between Seller and its shareholders; all minutes, stock
ledger and other corporate documents; provided, however, that upon
reasonable notice from Buyer to Seller or its successors-in-interest,
Seller or its successors-in-interest shall provide Buyer with access
at no charge to any of the foregoing-described material and with
copies of any of said documents to the extent such material and
documents pertain to the Business and Purchased Assets acquired by
Buyer; and
k. all of Seller's rights to receive mail and other
communications which do not relate in any way to the ownership of the
Purchased Assets or the operation of the Business;
3. any debt, liability or obligation of, or claim against,
any past or present shareholder, director or officer of Seller and their
respective affiliates.
4. Transfers of Personal Property Leases, Real Property
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Leases and Contracts. To facilitate the assignment or transfer of Personal
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Property Leases, Real Property Leases and
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Contracts, Seller shall execute such documents of assignment or transfer as
may be prepared by Buyer that are necessary or appropriate for evidencing
or recording the assignments or transfers to Buyer. Subject to the terms of
Section 2.D hereof, in the event any assignment or transfer of any Personal
Property Lease, Real Property Lease or Contract cannot be obtained, Seller
and Buyer shall enter into a license, sublicense, lease, or independent
contractor agreement, agency or other relationship with respect thereto
with the intent of providing the same benefits and obligations to Buyer as
if such assignment or transfer had occurred.
5. Transfer of Know-How. The communication of transferred
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Know-How from Seller to Buyer shall occur primarily through Buyer's
acquisition of property and employment of personnel of the Business. In
addition, in order to facilitate the transfer of such Know-How, Seller
shall use reasonable efforts, for a period of three (3) years from the
Closing Date, to provide to Buyer, upon Buyer's written request, copies of
any documents or other information in Seller's possession, defining or
specifying the subject matter, nature and extent of the Know-How and take
such other action as the parties mutually agree is reasonably necessary or
appropriate to effectuate the transfer of such Know-How.
B. Assignment of Intellectual Property Rights. On or as soon as
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possible following the Closing Date, Seller shall execute and deliver
assignments with respect to the Intellectual Property Rights, including all
goodwill associated therewith, as necessary to perfect ownership, including
record ownership, in and to the Intellectual Property Rights, including all
goodwill associated therewith.
C. Risk of Loss. The risk of loss and all obligations to insure
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the tangible assets of the Business shall remain with Seller until the Closing,
and shall be assumed by Buyer at the time of Closing.
D. Assumption of Contractual Rights and Obligations Related
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Thereto. At the time of Closing, Buyer shall assume the rights, warranty rights
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and obligations, and any other contractual obligations pursuant to the Personal
Property Leases, Real Property Leases, the Contracts, and the bids, quotations,
proposals and similar agreements entered into or made in the ordinary course of
the Business (collectively, the "Transferred Rights, Obligations and
Agreements"), to the extent set forth in Section 2.E hereof.
To the extent that the assignment or novation of any of the
Transferred Rights, Obligations and Agreements, or the assignment of the
Intellectual Property Rights under Section 2.B above, shall require the consent
of any other party (or in the event that any of the same shall be non-
assignable), neither the agreements contemplated by this Agreement nor any
actions taken hereunder pursuant to the provisions of any such agreements shall
constitute an assignment or novation or an agreement to assign or novate if such
assignment or novation or attempted assignment or novation would constitute a
breach thereof or result in the loss or diminution thereof; provided, however,
that in each such case, Seller and Buyer shall use commercially reasonable
efforts (without the obligation to incur any undue expense) to obtain the
consent of such other party to an assignment or novation to Buyer.
Notwithstanding the foregoing, it shall be a condition to closing that any
consents required for the assignment of the Transferred Rights, Obligations and
Agreements designated by Buyer shall have been obtained on terms and conditions
satisfactory to Buyer, in its sole discretion.
If such consent is not obtained, Seller shall cooperate with Buyer in
any reasonable arrangement designed to provide Buyer with the benefits under any
such Transferred Rights, Obligations and Agreements and the Intellectual
Property Rights, including appointing Buyer to act as its agent to perform all
of Seller's obligations under such Transferred Rights, Obligations and
Agreements and the Intellectual Property Rights and to collect and promptly
remit to Buyer all compensation payable pursuant to those Transferred Rights,
Obligations and Agreements and the Intellectual Property Rights and to enforce,
for the account and benefit of Buyer, any and all rights of Seller against any
other person arising out of the breach or cancellation of such Transferred
Rights, Obligations and Agreements and the Intellectual Property Rights by such
other person or otherwise (any and all of which arrangements shall constitute,
as between the parties hereto, a deemed assignment or transfer); provided that,
to the extent that Buyer requires Seller to undertake any services or take any
actions in furtherance of the performance of such Transferred Rights,
Obligations and Agreements and the Intellectual Property Rights, any such
services or actions shall be the subject of a separate agreement that the
parties shall, in good faith, negotiate as promptly as possible and which shall
be mutually acceptable to the parties. Each party shall be responsible for all
of its costs and expenses incurred by it in connection with the actions required
of it under this Section 2.D.
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E. Assumption of Certain Liabilities by Buyer. From and after the
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Closing, Buyer shall assume and be liable and responsible for only the following
liabilities and obligations directly relating to the ownership of the Purchased
Assets or the operation of the Business (the "Assumed Liabilities") and no
others:
1. all liabilities and obligations of Seller under all
Personal Property Leases, Real Property Leases, Contracts, or any other of
the Transferred Rights, Obligations and Agreements assigned or transferred
to Buyer pursuant to Section 2.A hereof (or deemed assigned or transferred
pursuant to Section 2.D hereof) which arise or are to be performed
following the Closing Date (except for those relating to pre-Closing
defaults(including actions, events or practices which may be the basis for
a claim of such a pre-closing default)), but excluding the "Excluded
Liabilities" (as defined in Section 2.F hereof);
2. all liabilities and obligations with respect to the
warranty policies and agreements of Seller described on Schedule 2.E.2
hereto and pursuant to the provisions of Section 6.D hereof (subject,
however, to Buyer's indemnification rights under Section 8.A.3);
3. all trade accounts payable and accrued liabilities of the
Business for supplies, materials and services incurred in the ordinary
course of business at the time of Closing as preliminarily set forth in
Schedule 2.E.3 hereto, which Schedule will be updated upon preparation of
the Closing Balance Sheet;
4. all liabilities and obligations of or related to the
Purchased Assets or the Business arising after the Closing Date (including,
without limitation, liabilities and obligations of the type described in
Section 2.F arising after the Closing Date) to the extent such liabilities
and obligations resulted from circumstances and/or events occurring after
the Closing Date;
5. all liabilities and obligations arising from or related to
current salaries and wages and related payroll taxes, routine employee
allowances and accrued vacation (all as accrued in the ordinary course of
business and reflected on the Closing Balance Sheet), but no other
obligation under any Benefit Plan, for those individuals who are hired by
Buyer and considered to be Transferred Employees (as hereafter defined);
6. all liabilities and obligations which arise following the
Closing Date under the capital leases listed on Schedule 2.E.6 hereto; and
7. all other liabilities reflected on a mutually-agreed upon
balance sheet dated as of the Closing Date reflecting the Purchased Assets
and Assumed Liabilities to be prepared by the parties as soon as
practicable following the Closing.
The assumption by Buyer of the Assumed Liabilities and the transfer
thereof by Seller shall in no way expand the rights or remedies of any third
party against Seller or Buyer as compared to the rights and remedies which such
third party would otherwise have had.
F. All Other Liabilities Excluded. Notwithstanding the foregoing,
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Seller agrees that Buyer is assuming only those liabilities and obligations
enumerated in Section 2.E and no others and Buyer shall have no liability or
responsibility for any liability or obligation arising out of Seller's ownership
or operation of the Purchased Assets or the Business prior to the Closing Date
(except as expressly provided in Section 2.E), including, without limitation,
the following liabilities and obligations of Seller (the "Excluded
Liabilities"):
1. any inter-company obligation between Seller or Delta or
any other affiliate of Seller or Delta;
2. any current or long-term liability or obligation of Seller
with respect to indebtedness for borrowed money;
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3. any liability or obligation of Seller with respect to
occurrences prior to the Closing Date not expressly assumed by Buyer under
Section 2.E hereof;
4. any liability or obligation of Seller for any injury to or
death of any person or damage to or destruction of any property, whether
based on negligence, strict liability, enterprise liability, products
liability or any other legal or equitable theory (including consequential
damages) arising from products manufactured or sold or services rendered by
Seller prior to the Closing Date, in all cases;
5. any liability of Seller for (i) occurrences prior to the
Closing Date with respect to any past or present employee which could give
such employee a cause of action against Seller, any employment
discrimination claims, any employee pension benefit plans or employee
welfare benefit plans or other benefit arrangement, or (ii) expenses paid
or payable to former employees whose employment has been terminated by
Seller prior to the time of Closing;
6. any action, suit, claim or proceeding against Seller based
on facts or circumstances occurring prior to the Closing Date (other than
those with respect to the Assumed Liabilities if any);
7. any liability or obligation arising from or relating to
post-retirement medical, life, dental or other benefit plans sponsored by
Seller;
8. any liability or obligation arising from or related to
employee pension benefit plans or employee welfare benefit plans or other
benefit arrangements sponsored by Seller;
9. any liability or obligation from or relating to federal,
state, or local taxes or assessments of any kind based on facts or
circumstances occurring prior to the Closing Date;
10. any liability or obligation of Seller arising prior to
the Closing Date with respect to any of the Transferred Rights, Obligations
and Agreements assigned or transferred by Seller to Buyer or any liability
or obligation thereunder, whenever arising, that arises as a result of a
breach or violation thereof occurring prior to the Closing Date;
11. without any limitation of Section 2.F.8 hereof, any
liabilities resulting from medical coverage, dental coverage and/or
disability coverage of Seller's employees, including with respect to any
claims for occurrences prior to the Closing Date or incurred prior to the
Closing Date, whether or not reported as of the Closing Date. A claim
shall be deemed to have been incurred upon the incurrence of a qualified
expense for which reimbursement or payment is sought; provided, however, a
claim for a hospitalization stay (and medical treatment during such stay)
which begins prior to the Closing Date and which ends after the Closing
Date shall be deemed to have been incurred prior to the Closing Date;
12. any liability or obligation of Seller resulting from
workers' compensation claims having a date of injury (or, in the case of a
claim relating to illness or occupational disease, the last significant
exposure) prior to the Closing Date and any liabilities resulting from any
such claims arising out of any violation of "Environmental Laws" (as
hereinafter defined) occurring prior to the Closing Date;
13. any liability or obligation of Seller arising from events
occurring prior to the Closing Date with respect to the property or assets
of third parties which may be in its possession or control;
14. any liability or obligation of Seller arising out of any
violation of Environmental Laws or relating to "Hazardous Materials" or
"Environmental Matters" (all hereinafter defined);
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15. any action, suit, claim or proceeding against Seller for
infringement of a third party's intellectual property rights based upon
facts or circumstances occurring prior to the Closing Date;
16. any liabilities resulting from agreements made between
Seller or its or Delta's employees, including, without limitation, pay-to-
stay contracts, contracts which pay a commission based upon the completion
of the transactions contemplated by this Agreement by Seller and agreements
to pay a bonus based upon the completion of a sale of the Purchased Assets
and/or any other assets owned by Seller; and
17. any liability or obligation of Seller relating to unpaid
wages, salaries or other benefits (including taxes, allowances and accrued
vacation) or any other employee cost whatsoever for any and all individuals
who are not deemed to be Transferred Employees.
Seller shall pay and discharge in accordance with Seller's past
practices or when due all of those liabilities relating to the Business which
Buyer has not specifically agreed to assume pursuant to the provisions of
Section 2.E. Notwithstanding the foregoing, Seller may contest any liabilities
in good faith, provided that the failure to discharge such liability shall not
result in any lien or charge against the Purchased Assets, Buyer or Seller at
any time and provided further that in so doing Seller shall take no actions
which will adversely affect Buyer's relationships with the customers or
suppliers of the Business.
3. Purchase Price; Payment; Adjustment.
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A. Purchase Price.
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1. Price. The purchase price for the sale and transfer
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of the Purchased Assets and the noncompetition covenant in Section 6.C
shall be Fourteen Million Four Hundred Thousand Dollars ($14,400,000), plus
the assumption of the Assumed Liabilities set forth in Section 2.E hereof
(the "Purchase Price").
2. Allocation. Seller and Buyer hereby agree that the
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Purchase Price paid for the Purchased Assets and the noncompetition
covenant in Section 6.C shall be allocated for purposes of this Agreement
and for tax purposes as set forth in Schedule 3.A.2, which Schedule may be
amended by mutual agreement of Seller and Buyer after the Closing. Seller
and Buyer acknowledge and agree that the allocations made pursuant to this
Section 3.A.2, and the following undertaking with respect to tax reporting,
have been specifically negotiated by the parties and are a part of the
basis of this Agreement. Seller and Buyer covenant and agree that each
shall prepare its tax returns employing the allocation made pursuant to
Schedule 3.A.2 and shall not take a position in any tax proceeding or audit
inconsistent with such allocation. Seller and Buyer shall give prompt
notice to each other of the commencement of any tax audit or the assertion
of any proposed deficiency or adjustment by any taxing authority or agency
which challenges such allocation.
B. Payment of the Purchase Price. At the Closing, Buyer shall,
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subject to the terms and conditions herein, pay [i] Thirteen Million Dollars
($13,000,000) in immediately available funds to the bank account of Seller
identified on Schedule 3.B hereto, and [ii] One Million Four Hundred Thousand
Dollars ($1,400,000) in immediately available funds to Bank One, Kentucky, N.A.
to fund the escrow account established under the Escrow Agreement to be entered
into by Buyer and Seller at Closing in substantially the form of Exhibit A
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hereto (the "Escrow Agreement").
C. Closing Date. At the closing of this transaction (the
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"Closing"), the transfer of title to and possession of the Purchased Assets
shall occur and the payment of the Purchase Price as set forth in Section 3.B
shall occur. At the Closing, each of the parties hereto shall execute and
deliver all consideration, instruments and documents reasonably required to
carry out the terms and provisions of this Agreement. Possession of all of the
Purchased Assets shall be given to Buyer by Seller immediately upon the Closing.
The Closing shall
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take place at the offices of Loeb & Loeb, LLP, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxx Xxxxxxx, Xxxxxxxxxx at 9:00 a.m. local time on November 12, 1997 or at
a date and time to be mutually agreed upon between the parties, but shall be
deemed effective as of 11:59 p.m., local time of the immediately preceding day
(the "Closing Date").
D. Waiver of Bulk Transfer Provisions. Buyer hereby waives
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compliance with all provisions of the bulk sales laws of any state, if
applicable, to the transactions herein contemplated, and in consideration of
such waiver Delta and Seller shall jointly and severally indemnify Buyer against
and hold it harmless from any and all loss, cost, damage, liability, deficiency
or expense (including reasonable attorneys' fees) resulting from or arising out
of such noncompliance provided that Buyer shall give notice to Seller of any
such loss, cost, damage, liability, deficiency or expense and Seller shall have
an opportunity to pay for and defend the claim for same.
4. Representations and Warranties of Seller and Delta. In order
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to induce Buyer to enter into this Agreement and to consummate the transactions
contemplated hereunder, Seller and Delta, jointly and severally, make the
following representations and warranties to Buyer.
A. Title to Personal Property and Condition of Assets.
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1. Except as set forth on Schedule 4.A attached hereto,
Seller has (i) good and marketable title to all of the tangible personal
property and assets which are used in the operation of the Business and
which Seller owns/or purports to own, and (ii) valid leasehold interests in
all leases of tangible personal property which are used in the operation of
the Business and which Seller leases or purports to lease, in each case
free and clear of any Liens, other than Permitted Liens. Except as set
forth on Schedule 4.A, all equipment of Seller and Seller's plant structure
used in the operation of the Business or included in the Purchased Assets
are in good operating condition and repair, subject to normal wear and tear
and the provision of usual and customary maintenance and repair performed
in the ordinary course with respect to similar equipment of like age and
assembly.
2. Seller does not own in fee any real property used in
the operation of the Business. Seller enjoys peaceful and undisturbed
possession under all leases of personal property included in the Purchased
Assets under which they are operating. Except as set forth on Schedule 4.A,
there are no existing defaults, or events which with the passage of time or
the giving of notice, or both, would constitute defaults by Seller or, to
the knowledge of Seller, by any other party to any such lease.
3. Except for leasehold interests and other leased
properties specifically identified on Schedule 4.A hereto, and customer
owned assets used in the ordinary course of business, there are no tangible
assets owned by any third party which are used by Seller in the operation
of the Business.
4. As used herein, the term "Lien" means any mortgage,
pledge, hypothecation, lien, security interest, financing statement, charge
or other similar encumbrance. The term "Permitted Liens" means (a) Liens
for taxes not yet due and payable or being contested in good faith by
appropriate proceedings and as to which adequate reserves have been
established on Seller's books and records, (b) easements, covenants,
conditions and restrictions of record, as to which no material violation or
encroachment exists or, if such violation or encroachment exists, as to
which the cure of such violation or encroachment would not materially
interfere with the conduct of Seller's business, (c) workers or
unemployment compensation Liens arising in the ordinary course of business,
and (d) mechanic's, materialman's, supplier's, vendor's, landlord's or
similar Liens arising in the ordinary course of business securing amounts
which are not delinquent.
B. Real Property.
-------------
1. Schedule 4.B attached hereto sets forth a list and a
brief description of all real property leased, subleased or otherwise
occupied by Seller and used in the operation of the Business or included in
the Purchased Assets, indicating the nature of Seller's interest therein
(collectively, the "Real Property"). Seller has valid leasehold interests
in all leases of Real Property which it leases or purports to
9
lease, free and clear of any Liens, other than Permitted Liens. To Seller's
knowledge, there are no pending or threatened condemnation, expropriation,
eminent domain or similar proceedings affecting all or any portion of the
Real Property.
2. Seller enjoys peaceful and undisturbed possession under all
Real Property leases under which Seller is operating. All of such leases
are valid, subsisting and in full force and effect, no notice of
termination has been received by Seller with respect thereto and there are
no existing defaults, or events which with the passage of time or the
giving of notice, or both, would constitute defaults by Seller or, to the
knowledge of Seller, by any other party thereto.
3. There are no leases, subleases (except as respects the SCE
Credit Union office space and GNP parking space), licenses, concessions or
other agreements, written or oral, by Seller granting to any party or
parties the right to use or occupancy of any portion of the Real Property.
C. Organization and Qualification.
------------------------------
1. Each of Seller and Delta is a corporation validly existing
and in good standing under the laws of the States of Delaware and Nevada,
respectively, with corporate power to own its properties and to carry on
its business as it is now being conducted and Seller is duly qualified to
do business and in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business makes
such qualification necessary.
2. books of account and other records of Seller relating to
the Business, all of which have been made available to Buyer, are complete
and in accordance with applicable generally accepted accounting principles,
consistently applied, and applicable laws and have been maintained in
accordance with sound business practices. At the Closing, all of those
books and records will be in the possession of Seller, or a designated
representative of Buyer.
3. Except as set forth in Schedule 4.C attached hereto, Seller
has no direct or indirect equity interest by stock ownership, contract or
otherwise in any other corporation, partnership, joint venture, firm,
association or business enterprise.
D. Power and Authority. Each of Seller and Delta has the power
-------------------
(corporate or otherwise) to execute and deliver this Agreement and to incur and
perform its obligations hereunder. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of
Seller and Delta, and this Agreement is the legal, valid and binding obligation
of each of Seller and Delta, enforceable in accordance with its terms.
E. Approvals and Consents; Noncontravention. Except as set forth
----------------------------------------
on Schedule 4.E attached hereto, the execution, delivery, and performance of
this Agreement by Seller and Delta and the consummation of the transactions
contemplated hereby, will not (i) violate any statute, regulation or ordinance
of any governmental authority or require any filing with or authorization,
consent or approval of any government or governmental agency or of any third
party under any agreement or instrument, required to be obtained by Seller or
Delta, (ii) conflict with, result in the breach of, or constitute a violation or
default under any of the provisions of the Articles of Incorporation or By Laws
of Seller or Delta, (iii) conflict with or result in a breach of any Personal
Property Lease, Real Property Lease, or Material Agreement (as defined in
Section 4L), or constitute a default (or an event which, with the lapse of time
or the giving of notice, or both, would constitute a default) thereunder or
result in the right of any party to exercise any remedy or to accelerate
maturity or performance thereunder or terminate or modify any such item, or (iv)
result in the creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever on or with respect to the Purchased Assets.
F. Tax Returns; Withholdings. Seller has filed all tax returns
-------------------------
which are required to have been filed, and has paid all taxes and governmental
charges due and payable by it, subject to the good faith contesting of any such
items. Each such tax return as filed was true, correct and complete in all
material respects and has been made available to Buyer. All amounts required to
be withheld by Sellers from employees for income tax,
10
social security contributions, unemployment tax, or workers' compensation have
been withheld and paid to the appropriate governmental agencies. Except as set
forth on Schedule 4.F attached hereto, there is no claim or assessment pending
or, to the knowledge of Seller, threatened against Seller for any alleged
deficiency in taxes. There are no pending audits of any tax returns of Seller.
G. Compliance with Laws. Seller has complied with all applicable
--------------------
laws and regulations of foreign, federal, state and local governments and all
agencies thereof including, without limitation, Environmental Laws (hereinafter
defined) in the operation of the Business, and no claims have been filed
alleging a violation of any such law or regulation which have not been
heretofore settled. Seller holds all permits, licenses, certificates and other
authorizations of foreign, federal, state and local governmental agencies
necessary to conduct the Business as it is presently being conducted. All such
permits, licenses and certificates are listed on Schedule 4.G attached hereto
and are in full force and effect, and Seller has not received any notice of
violation, or intent to revoke or to not renew, any of such permits, licenses
and certificates.
H. Litigation. Except as set forth on Schedule 4.H attached
----------
hereto, there are no legal actions, suits, arbitrations, administrative or other
governmental proceedings pending or, to Seller's knowledge, threatened against
or affecting Seller or the Business at law or in equity or by or before any
governmental department, commission, board, agency, bureau, tribunal or
instrumentality which, if determined adversely to Seller would have a material
adverse effect on the Business or the financial condition or results of
operations of Seller or materially and adversely affect the ability of Seller to
consummate the transactions contemplated hereby.
I. Financial Statements. Seller has delivered to Buyer copies of
--------------------
the audited financial statements of Seller, consisting of a balance sheet,
income statement and cash flow statement, as of and for the periods ended
December 31, 1994, 1995 and 1996 and the unaudited balance sheet, income
statement and cash flow statement as of and for the period ended August 24, 1997
(collectively, the "Financial Statements"). The Financial Statements (i) have
been prepared from and are in accordance with Seller's books and records, (ii)
are complete and correct and fairly and accurately present in all material
respects the financial condition and results of operations of Seller as of the
dates thereof and for the periods covered thereby, and (iii) were prepared in
accordance with generally accepted accounting principles and Seller's accounting
practices, policies and procedures, applied on a consistent basis throughout the
period indicated. The Business has been conducted only in the ordinary course
of business since December 31, 1996.
J. Absence of Undisclosed Liabilities. [intentionally omitted]
----------------------------------
K. Employees and Employee Benefits. Seller has the employees set
--------------------------------
forth on Schedule 4.K.1(i) attached hereto and there are no employment or other
agreements with any such persons except as set forth on Schedule 4.K.1(i).
Except as set forth on Schedule 4.K.1(ii) attached hereto, Seller is not a party
or subject to any collective bargaining or similar labor agreement nor has
Seller encountered any labor union organizing activity or had any actual or
threatened employee strikes, work stoppages, slow downs or lockouts.
1. Schedule 4.K.1(iii) attached hereto lists each bonus,
pension (as defined in the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current
employee, officer or director of Seller related to the Business, and any
employment, consulting, severance, termination or indemnification
agreement, arrangement or understanding with any employee of Seller related
to the Business (collectively, "Benefit Plans").
2. Seller has delivered to Buyer true, complete and correct
copies of each Benefit Plan (or, in the case of any unwritten Benefit
Plans, descriptions thereof).
3. No Benefit Plan contains any provision that imposes any
liability or obligation on Buyer as a successor employer, or in any other
manner, with respect to Seller's obligations
11
under such Benefit Plan, absent Buyer's written consent and assumption of
such Benefit Plans and obligations.
4. Seller and any other entity that would be aggregated with
Seller under Code Section 414(b), (c), (m) or (o) (collectively, the
"Seller Affiliates") have substantially complied and will substantially
comply with the continuation coverage provisions of ERISA Section 601-608
and Code Section 4980B with respect to all group health plans, as such term
is defined in Code Section 5000(b)(1) ("COBRA Coverage"), of Seller and the
Seller Affiliates, and there are no past or current violations of the
continuation coverage provisions by Seller and the Seller Affiliates that
could give rise to any material liability.
5. Buyer will incur no obligation or liability under or
relating to any Benefit Plan, including multi-employer plans, ever
maintained by Seller or Seller's Affiliates.
L. Contracts. Schedule 4.L attached hereto lists the following
---------
material contracts and leases of Seller ("Material Agreements") affecting the
Business:
1. Contracts or other agreements calling for the purchase of
raw materials or supplies in any one year of more than $50,000 in any case
(or $250,000 in the aggregate in any one year, in the case of any related
series of contracts and agreements);
2. Contracts or other agreements calling for the sale of
products or goods in any one year of more than $50,000 in any case (or
$250,000 in the aggregate in any one year, in the case of any related
series of contracts and agreements);
3. Contracts or other agreements with sales representatives,
agents or similar persons;
4. Contracts or other agreements for the lease or use of real
property;
5. Contracts or other agreements for the lease or use of
personal property or equipment with the lease payments thereunder of more
than $50,000 per year in any one case;
6. Contracts with customers which accounted for more than
five (5%) percent of Seller's revenues for the 12 months ended December 31,
1996;
7. Contracts to which Seller is a party which were entered
into outside the ordinary course of business;
8. Any other contract material to the Business; and
9. Contracts between Seller and any affiliate of Seller.
Except as set forth on Schedule 4.L, all of the Material Agreements are in full
force and effect, and no breach or default by Seller or, to the best of Seller's
knowledge, by any other party has occurred with respect to any material
provision of such agreements. Except as identified on Schedule 4.L, no approval
or consent of any person is needed in order that the Material Agreements set
forth on Schedule 4.L continue in full force and effect following the
consummation of the transactions contemplated by this Agreement.
12
M. Employment.
----------
1. Seller is in compliance in all material respects with
all applicable laws respecting employment and employment practices,
including terms and conditions of employment, equal opportunity, collective
bargaining and wages and hours. Except as disclosed on Schedule 4.M, Seller
has not, during the immediately preceding 12 months, experienced any
material dispute with any of its present employees.
2. To the knowledge of Seller, no employee of Seller is a
party to, or is otherwise bound by, any agreement or arrangement, including
any confidentiality, noncompetition, or proprietary rights agreement,
between such employee and any other person that in any way materially
adversely affects (i) the performance of his duties as an employee of
Seller, or (ii) the ability of Seller to conduct its business. No officer,
or other key employee of any company has notified Seller of the intent of
any employee of Seller to terminate his employment with Seller.
N. Intellectual Property Rights. Seller owns or has the right
----------------------------
to use all of the Intellectual Property Rights and Know-How which are necessary
for the conduct of, or are used in, the Business as the Business is presently
being conducted and such rights and interests are either (i) freely transferable
to Buyer or (ii) will be licensed and made available for use by Buyer without
cost. Except as listed in Schedule 4.N hereto, (i) Seller has no knowledge nor
has it received any notice to the effect that any service or products that it
provides or sells, or any process, method, part or material it employs in the
Business or used by Seller, infringes on any trademark, trade name, copyright or
patent, or is in conflict with any asserted right of another, and (ii) there is
no pending or, to the knowledge of Seller, threatened claim or litigation
against Seller contesting its right to use any of the Intellectual Property
Rights or Know-How being transferred or licensed to Buyer, or asserting its
misuse of any thereof, which would deprive Buyer of its right to assert its
rights thereunder or which would prevent the sale of any service or product
produced, provided or sold by Buyer utilizing the Intellectual Property Rights
or Know-How to be transferred to Buyer.
O. Insurance Policies. Seller has delivered to Buyer a list of
------------------
all insurance policies or binders of insurance or programs of self-insurance
which relate to the Business or the Purchased Assets. No written notice of
cancellation or nonrenewal with respect to, or disallowance of any material
claim under, any such policy or binder has been received by Seller.
P. Environmental Matters.
---------------------
1. Definitions. As used in this Agreement:
-----------
a. "Hazardous Materials" means (a) any and all
hazardous substances, pollutants, and contaminants (as defined by the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA")), solid or hazardous wastes (as defined
by the Resource Conservation and Recovery Act ("RCRA")); hazardous
materials (as defined by the Hazardous Materials Transportation Act);
toxic substances (as defined by the Federal Toxic Substances Control
Act ("TSCA")); toxic chemicals or extremely hazardous substances (as
defined by the Emergency Planning and Community Right-To-Know Act);
hazardous air pollutants (as defined by the Clean Air Act); hazardous
substances (as defined by the Clean Water Act); (b) petroleum or
petroleum products; polychlorinated biphenyls ("PCBs"); asbestos-
containing materials; and (c) any other toxics, chemicals, wastes,
substances, or materials, including, without limitation, asbestos and
lead based paint, which are regulated under any of the Environmental
Laws (as defined herein);
b. "Environmental Laws" means all applicable federal,
state, local and foreign laws, rules, regulations, codes, ordinances,
orders, decrees, permits, licenses and judgments in effect as of the
date of this
13
Agreement and relating to the environment and/or the use, generation,
storage, disposal, treatment, transportation, recycling, sale or
release of Hazardous Materials, including, without limitation, CERCLA,
RCRA, the Clean Water Act, the Clean Air Act and TSCA;
c. "Environmental Matters" means matters relating to
pollution, contamination or protection of the environment, release or
disposal of Hazardous Materials, compliance with Environmental Laws
(including, without limitation, matters relating to any "Environmental
Costs" (as defined herein) or to any releases or threatened releases
of Hazardous Materials into the air, surface water, groundwater or
soil, or resulting from the generation, use, storage, treatment,
recycling, transportation, disposal or sale of Hazardous Materials);
and
d. "Environmental Costs" means any cleanup costs,
remediation, removal, or other response or site rehabilitation costs
(including, without limitation, costs to bring the Business into
compliance with all applicable Environmental Laws), investigation
costs (including, without limitation, the reasonable fees and costs of
consultants, legal counsel and other experts in connection with any
environmental investigation, testing, audits, assessments or studies),
losses, liabilities, obligations, payments, damages (including,
without limitation, any actual, punitive or consequential damages (a)
to third parties (including employees) for personal injury or damage
to property, or (b) to natural resources), fines, penalties,
judgments, and amounts paid in settlement arising out of or resulting
from any Environmental Matter.
2. Environmental Representations and Warranties of Seller and
----------------------------------------------------------
Delta. Seller and Delta, jointly and severally, hereby represent and
-----
warrant to Buyer that:
e. all permits, approvals, authorizations, licenses,
certificates of authorization, registrations or other consents
required under all applicable Environmental Laws for the operation of
the Business and the occupancy as tenant of the properties listed on
Schedule 1.A.2 hereto, (the "Environmental Permits") have been
obtained and there are no pending or threatened actions to modify,
restrict, rescind or challenge any Environmental Permit;
f. there are no violations of any Environmental Permit, and
to the best knowledge of Seller, no condition at any of the properties
listed on Schedule 1.A.2 hereof which, with notice to the appropriate
governmental agency, would constitute a violation of any Environmental
Permit;
g. Seller has not received any notice of the violation of
any Environmental Laws by Seller in connection with the operation of
the Business at any of the properties listed on Schedule 1.A.2 hereof
or of any pending or threatened legal action against Seller in
connection with the operation of the Business at any of the properties
listed on Schedule 1.A.2 hereof under the authority of any
Environmental Law or related to the release of or exposure to any
Hazardous Material;
h. except as disclosed in Schedule 4.P hereto, no amounts
of Hazardous Materials were disposed of by Seller or by any other
person prior to the Closing Date in, on, under, above or around the
properties listed on Schedule 1.A.2;
14
i. the processes, policies and activities of
Seller with respect to the Business are in full compliance with all
applicable Environmental Laws and regulations and Seller possesses all
required permits, certificates and licenses required to operate the
Business, and all such permits, certificates and licenses are valid;
and
j. to the best knowledge of Seller there are no
underground storage tanks on, at or below any of the real property
owned or leased by Seller.
Q. Absence of Certain Changes and Events. Except as set
-------------------------------------
forth in Schedule 4.Q and as otherwise contemplated by this Agreement, since
December 31, 1996, Seller has conducted the Business only in the ordinary
course, and has not:
a. Suffered any damage or destruction adversely
affecting the properties or Business;
b. Made any declaration, setting aside or payment
of any dividend or other distribution of assets (whether in cash,
stock or property) with respect to the capital stock of Seller or any
direct or indirect redemption, purchase or other acquisition of such
stock;
c. Suffered any material adverse change in its
assets, liabilities, financial condition, or relationships with any
suppliers or customers;
d. Increased the compensation payable or to become
payable to any employee or increased any bonus, insurance, pension or
other employee benefit plan, payment or arrangement for such employees
or entered into or amended any employment, consulting, severance or
similar agreement other than increases and bonuses in the ordinary
course of the Business;
e. Incurred any liability or obligation (absolute,
accrued, contingent or otherwise) not incurred in the ordinary course
of business consistent with past practice;
f. Paid, discharged or satisfied any claim,
liability or obligation other than payment in the ordinary course of
business consistent with past practice;
g. Waived any material claims or rights;
h. Sold, transferred or otherwise disposed of any
of its assets, except in the ordinary course of business consistent
with past practice;
i. Made any change in any method of accounting, or
any material practice or principle of accounting;
j. Paid, loaned or advanced any amount to or sold,
transferred or leased any asset to any employee except for normal
compensation involving salary and benefits;
15
k. Entered into any material commitment or
transaction, other than in the ordinary course of business, affecting
the operations of Seller; or
l. Agreed in writing, or otherwise, to take any
action described in this Section.
R. Transactions with Affiliates. Schedule 4.R sets forth a
----------------------------
complete and correct list of any material contract, agreement, business
arrangement or relationship between Seller and any affiliate of Seller related
to the Business.
X. Xxxxxx of Attorney. Except as noted on Schedule 4.S, other
------------------
than in the ordinary course of business, Seller has not granted any power of
attorney to any person for any purpose whatsoever related to the Business, which
power of attorney is currently in force.
T. Customers. Except as disclosed on Schedule 4.T, Seller is
---------
not involved in any material controversy with any of Seller's customers of the
Business, nor has Seller received written notice from a customer of the Business
that any of Seller's customers intends to terminate or materially adversely
alter its relationship with Seller or with Buyer after the Closing.
U. No Third Party Options. There are no existing agreements,
----------------------
options, commitments or rights with, of or to any person to acquire any of
Seller's assets, properties, or rights or any interest therein, except for those
contracts entered into in the normal course of business consistent with past
practice for the sale of inventory of Seller.
V. Warranty and Product Liability Claims.
-------------------------------------
1. Each product manufactured, sold, leased or
delivered by Seller through the Closing related to the Business has been in
conformity in all material respects with all applicable contractual
commitments and applicable laws and all express and implied warranties to
customers. Under the historic warranty experience of Seller, Seller has not
been required, pursuant to generally accepted accounting principles,
consistently applied, to create a reserve for product warranty claims of
the Business other than as set forth on the Financial Statements. No
product manufactured, sold, leased, serviced or delivered by Seller prior
to the Closing related to the Business is subject to any guaranty, warranty
or other indemnity beyond the applicable standard terms and conditions of
sale or lease. Schedule 4.V sets forth the standard terms and conditions of
sale, service or lease for Seller for products of the Business (including
applicable guaranty, warranty and indemnity provisions).
2. Except for routine warranty claims for the return
of defective or nonconforming merchandise, there exist no claims and to the
knowledge of Seller there is no reasonable basis for the assertion of any
claim against Seller for injury to persons or property suffered by any
person as a result of the sale, service or manufacture of any product by
Seller related to the Business prior to the Closing, including, but not
limited to, claims arising out of the defective or unsafe nature of the
products of Seller. Schedule 4.V sets forth a complete and correct list and
brief description of all product liability claims that have been filed or
made against Seller since January 1, 1994.
W. Inventory and Accounts Receivable. Except as set forth on
---------------------------------
Schedules 2.A.1 and 2.A.1.e:
1. The Inventory is of a quality and quantity usable
and salable in the ordinary course of the Business.
2. The accounts receivable of Seller are bona fide and
arose out of arm's length transactions in the ordinary course of business
of Seller in accordance with the terms and provisions contained in any
documents relating thereto. There are no material setoffs, counterclaims or
disputes asserted or conditions precedent to payment therefor with respect
to any such accounts receivable, and no
16
discount or allowance from any such accounts receivable has been made or
agreed to. All such accounts receivable are collectible in full in the
ordinary course of business.
X. Full Disclosure. No representation or warranty by Seller
---------------
or Delta contained in this Agreement and no statement contained in any
certificate or other instrument furnished or to be furnished to Buyers hereunder
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact necessary to make the statements contained
herein or therein not misleading in any material respect.
5 Representations and Warranties of Buyer. In order to induce
---------------------------------------
Seller to enter into this Agreement and to consummate the transactions
contemplated hereunder, Buyer makes the following representations and warranties
to Seller.
A. Organization and Qualification. Buyer is a corporation
------------------------------
validly existing and in good standing under the laws of the State of Delaware
with corporate power to own its properties and to carry on its business as
presently conducted.
B. Power and Authority. Buyer has the corporate power to
-------------------
execute and deliver this Agreement and to incur and perform its obligations
hereunder. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Buyer, and this Agreement is
the legal, valid and binding obligation of Buyer enforceable in accordance with
its terms.
C. Approvals and Consents; Noncontravention. The execution,
----------------------------------------
delivery, and performance of this Agreement by Buyer and the consummation of the
transactions contemplated hereby, will not (i) conflict with, result in the
breach of, or constitute a violation or default under any of the provisions of
the Certificate of Incorporation or By Laws of Buyer, or (ii) conflict with or
result in a breach of any agreement, deed, contract, mortgage, indenture, writ,
order, decree, contractual obligation or instrument to which Buyer is a party or
by which it or any of its assets are or may be bound, or constitute a default
(or an event which, with the lapse of time or the giving of notice, or both,
would constitute a default) thereunder.
D. Full Disclosure. No representation or warranty by Buyer
---------------
contained in this Agreement and no statement contained in any certificate or
other instrument furnished or to be furnished to Sellers hereunder contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact necessary to make the statements contained herein or
therein not misleading in any material respect.
6. Covenants.
---------
A. Publicity. Buyer and Seller shall consult with each other
---------
before issuing any press release concerning the transactions contemplated by
this Agreement and, except as may be required by applicable law or any listing
agreement with or regulation or rule of any stock exchange or over the counter
market on which the securities of Seller or Buyer (or any affiliate thereof) are
listed or traded, will not issue any such press release prior to such
consultation. If Buyer or Seller is so required to issue such press release it
shall use its best efforts to inform the other parties hereto prior to issuing
such press release, but the approval of the other parties shall not be required.
B. Retention of and Access to Books and Records and Personnel.
----------------------------------------------------------
For a period of seven (7) years after the Closing Date, the parties shall retain
all books or records relating to the Business, and any party, wishing to dispose
or destroy books or records, shall provide not less than thirty (30) days prior
written notice to the other party of such proposed action. If the recipient of
such notice desires to obtain any of such documents, it may do so by notifying
the other party in writing at any time prior to the scheduled date for such
destruction or disposal. Such notice must specify the documents which the
requesting party wishes to obtain. The parties shall then promptly arrange for
the delivery of such documents. All out-of-pocket costs associated with the
delivery of the requested documents shall be paid by the requesting party. Buyer
shall, subject to such reasonable limitations as may be necessary to protect
proprietary information, at the expense of Seller, and on reasonable prior
notice to Buyer, (a) afford Seller, and its counsel, accountants, consultants
and other representatives reasonable access during
17
normal business hours at the business locations of the Purchased Assets to
examine and copy the books, tax returns, records and files of Seller which
relate to periods prior to the Closing Date, (b) cooperate with reasonable
requests of Seller with respect to gathering information contained therein which
may be necessary to respond to inquiries or requests made by any governmental
authority or courts which relate to any tax returns or other documents filed by
or on behalf of Seller prior to or relating to the periods prior to the Closing
Date, and (c) provide Seller with reasonable access to employees of Buyer
previously associated with Seller who have knowledge needed by Seller with
respect to the foregoing. Seller shall, at Buyer's sole expense, during normal
business hours, afford Buyer and its agents reasonable access to and the
opportunity to review and make copies of, all canceled checks of Seller relating
to the Business in connection with any reasonable request of Buyer.
C. Covenants of Seller, Delta, Impactdata and Xxxxxx.
-------------------------------------------------
1. Noncompetition. For a period of five (5) years after the
--------------
Closing Date, each of Seller, Delta, Impactdata and Xxxxxx will not,
directly or indirectly, engage in, or own an interest in or be involved or
connected in any manner with any person or entity which engages in, any
present or future business activity in the United States in competition
with the Business as presently conducted. If any portion of this
restrictive covenant is held to be unreasonable, arbitrary or against
public policy, each covenant shall be considered to be divisible both as to
time and geographic area; and each one (1) week of the specified period
shall be deemed to be a separate period of time and, each political
subdivision within each state in the United States, shall be deemed to be
a separate geographic area, so that the maximum time and geographic area
shall remain effective so long as the same is not unreasonable, arbitrary
or against public policy. This covenant shall not prohibit Seller from
honoring warranty claims arising from the Business as may be required
hereunder.
2. Protection of Confidential Information. Each of Seller,
--------------------------------------
Delta, Impactdata and Xxxxxx hereby agrees, for a period of five (5) years
after the Closing Date to safeguard against disclosure to third parties all
Trade Secrets transferred to Buyer hereunder, by using reasonable secrecy
measures and not less than the same degree of care as for its own similar
proprietary information.
3. Solicitation of Employees. For a period of five (5) years
-------------------------
after the Closing Date, each of Seller, Delta, Impactdata and Xxxxxx shall
not, without Buyer's prior written consent, directly or indirectly solicit
any then-current employee of Buyer nor shall Seller, Delta, Impactdata or
Xxxxxx encourage any such employee to terminate his or her employment with
Buyer.
4. Intellectual Property. To the extent Seller fails to
---------------------
transfer any Intellectual Property Rights or Know-How or to make available
any which are currently used in the operation of the Business as it is
presently conducted, Seller shall take all commercially reasonable actions
required to effect or assist such transfer so as to confer upon Buyer those
benefits held by Seller which attend a use of such Intellectual Property
Rights in connection with the Business. Nothing in this Section 6.C.4
shall be construed as limiting the representations and warranties contained
in Section 4.N.
5. Name. As soon as possible following Closing, Seller shall
----
amend its articles of incorporation to change its name to a name not
similar to "Datatape," and reasonably acceptable to Buyer, and Delta shall
amend its articles of incorporation to change its name to a name not
similar to "Delta Tango," and reasonably acceptable to Buyer.
6. Bond Notices. As soon as practicable after Closing,
------------
Seller shall deliver notices providing for the termination of Seller's bond
financing.
7. Instructions. As of the Closing Seller shall execute with
------------
Buyer instruction letters to the paying entities under the accounts
receivable included in the Purchased Assets and promptly thereafter such
documents as provided by Buyer to perfect the transfer of governmental
receivables included in the accounts receivable included in the Purchased
Assets.
18
8. Seller Plan. Seller will, promptly after the Closing,
-----------
take the necessary steps to amend the Datatape Incorporated Capital
Accumulation Plan (the "Plan") to allow for the tax-free rollover of
outstanding Plan loans to the tax-qualified deferred contribution
retirement plan maintained by Buyer for those employees of Seller who are
eligible to make rollover contributions to Buyer's plan (the "Acquired
Employees"). Said Plan amendment and rollover of the loans shall occur
before the loans default under the terms of the loan policy maintained
under the Plan. If the Plan loans will default before Seller can obtain an
IRS determination letter on the termination of the Plan, Seller shall amend
the Plan to allow for distributions to the Acquired Employees pursuant to
Section 401(k)(10) of the Internal Revenue Code of 1986, as amended, and
further to allow for the tax-free rollover of the loans as stated above.
Said Plan amendment and rollover of the loans shall occur before the loans
default under the terms of the loan policy maintained under the Plan.
D. Covenants of Buyer.
------------------
1. Employment.
----------
m. Buyer shall offer employment to certain of the
employees of the Business set forth on Schedule 6.D.1 who are actively
employed regular full time workers as of the Closing Date at a salary
amount in excess of ninety percent (90%) of the salary paid to each
such employee by Seller immediately prior to the Closing. Eligible
employees shall be extended offers of employment by Buyer immediately
after the Closing on terms and conditions to be determined by Buyer in
its sole discretion (except that Buyer shall provide deferred
compensation under a plan of Buyer as listed on Schedule 6.D.1.a.(1))
(the "Transferred Employees").
n. Seller shall retain responsibility for all obligations
to any employee of the Business who is not deemed to be a Transferred
Employee including the following:
(1) employees of the Business who are not willing to
accept an offer of employment with Buyer;
(2) employees of the Business who are on leave of
absence (other than vacation) as of the Closing Date;
(3) employees of the Business who are on medical
leave of absence due to a short or long term disability as of the
Closing Date;
(4) employees of the Business who are not actively
at work on the Closing Date due to a work-related injury for which
they are collecting workers' compensation benefits;
(5) retirees; and
(6) any employees of the Business not deemed to be a
Transferred Employee.
2. Rights of Third Parties. Notwithstanding anything to
-----------------------
the contrary, the foregoing provisions of Section 6.D.1 of this Agreement
constitute agreements between Buyer and Seller, and no Transferred
Employee, any other employee, or any other person or entity, shall be
deemed to be a third-party beneficiary or have the right to claim any
particular benefit to aggregation of benefits as a result of such
provisions.
19
3. Warranty Claims. Buyer shall honor and be responsible for
---------------
all warranty, repair and service obligations (the "Warranty Claims") for
the Business for goods manufactured or sold by Buyer after the Closing
Date. Buyer shall also perform in-warranty service and repair work on
behalf of Seller for goods manufactured and sold by Seller prior to the
Closing Date to the extent such service and repair work is accrued for and
reserved on the Closing Balance Sheet. Buyer shall be indemnified by
Seller pursuant to Section 8.A.3 for all other Warranty Claims.
7. Taxes.
-----
A. Taxes Related to Purchase of Assets. Seller shall bear sole
-----------------------------------
responsibility for all taxes, including, but not limited to bulk sales or
equivalent sale or transfer taxes which are due and payable in connection with
the transactions contemplated by this Agreement. Buyer shall provide Seller or
the relevant taxing authority any documents which would reduce, mitigate or
eliminate any liability arising from this paragraph.
B. Pre-Closing Taxes. Seller shall be solely responsible for all
-----------------
income, sales, use, personal property and other taxes which are attributable to
the operation of the Business for periods ending on or prior to the Closing
Date, regardless of whether such taxes are due and payable after the Closing
Date, and similarly shall be entitled to any tax refunds with respect thereto.
Real property taxes assessed in 1997 against any real property included in the
Purchased Assets shall be prorated by Seller and Buyer based on the number of
days of their respective ownership of such property in 1997.
C. Post-Closing Taxes. Buyer shall bear full responsibility for
------------------
all income, sales, use, personal property and other taxes which are attributable
to the operation of the Business solely for periods after the Closing Date.
8. Indemnification.
---------------
A. Seller and Delta. Seller and Delta shall jointly and severally
----------------
indemnify, defend and hold harmless Buyer, its officers, directors and employees
and their respective successors and assigns (collectively, the "Buyer
Indemnitees") from and against, and shall reimburse the Buyer Indemnitees for,
all suits, claims, demands, actions, causes of action, losses, costs,
assessments, judgments, damages, or expenses (including, without limitation, any
fines, penalties, punitive damages, and reasonable fees and disbursements of
counsel and other expenses incurred investigating or defending any of the
foregoing or enforcing this Agreement) (collectively, "Losses") imposed upon or
incurred by any of the Buyer Indemnitees, directly or indirectly, and whether or
not the result of any third party claim, resulting from or arising out of or
with respect to (i) any breach of any of Seller's or Delta's representations and
warranties in this Agreement or in any other schedule, certificate or instrument
delivered by Seller or Delta pursuant hereto (whether discovered before, during
or after the Closing), (ii) any breach by Seller, Delta, Impactdata, or Xxxxxx
of its covenants and agreements in this Agreement or in any other instrument
delivered pursuant hereto at the Closing, and (iii) Seller's failure to pay,
discharge or perform any of its liabilities or obligations which are not
expressly assumed by Buyer under this Agreement.
B. Buyer. Buyer shall indemnify, defend and hold harmless Seller,
-----
its officers, directors and employees and their successors and assigns
(collectively, the "Seller Indemnitees") from and against, and shall reimburse
the Seller Indemnitees for, all Losses imposed upon or incurred by any of the
Seller Indemnitees, directly or indirectly, and whether or not the result of any
third party claim, resulting from or arising out of or with respect to (i) any
breach of any of Buyer's representations and warranties in this Agreement or in
any other schedule, certificate or instrument delivered by Buyer pursuant hereto
(whether discovered before, during or after the Closing), (ii) any breach by
Buyer of its covenants and agreements in this Agreement or in any other
instrument delivered pursuant hereto at the closing, and (iii) Buyer's failure
to pay, discharge or perform any of the Assumed Liabilities.
C. Indemnity Procedure. Subject to the time limitations and
-------------------
amounts set forth in Section 8.D below, Buyer, Seller and Delta shall each
follow the following procedures, as the case may be:
1. If By Seller and Delta. Buyer shall promptly notify
----------------------
Seller (for itself and on behalf of Delta) in writing of the existence of
any claim, demand or other matter ("Claim") to which, in
20
Buyer's reasonable judgment, Seller and Delta indemnification obligations
hereunder would apply. Seller and Delta shall thereafter have ten (10)
business days to determine whether, in their reasonable judgment, they are
obligated to indemnify Buyer with respect to such claim. If Seller and
Delta determine, within such ten (10) business day period, that they are so
obligated, they shall notify Buyer of their determination thereof.
Thereafter, Seller and Delta, upon Buyer's request, shall assume the
defense thereof, including retaining counsel reasonably satisfactory to
Buyer to represent Buyer, and shall pay the fees and expenses of any such
counsel related to such proceeding as well as any fees or expenses incurred
by Buyer to the date of Seller's and Delta's assumption of the defense. In
any such proceeding, Buyer shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of Buyer.
If Seller and Delta find that they are not so obligated, or they
fail to notify Buyer of their determination during such ten (10) business
day period, Seller, Delta and Buyer shall submit the issue of whether
Seller and Delta are obligated to indemnify Buyer with respect to such
Claim, to binding arbitration to be held in Louisville, Kentucky, in
accordance with, and with a single arbitrator to be selected under, the
Commercial Arbitration Rules of the American Arbitration Association as
then in effect. The arbitrator so selected shall use his or her best
efforts to resolve this issue within thirty (30) days after his or her
selection. If the arbitrator determines that Seller and Delta are
obligated to indemnify Buyer with respect to such Claim, then Seller and
Delta shall immediately assume the defense thereof, reimburse Buyer for all
Buyer's reasonable costs directly related to the defense of such Claim,
including Buyer's reasonable costs directly related to the arbitration, and
shall pay the fees and expenses of the arbitrator. If the arbitrator
determines that Seller and Delta are not obligated to indemnify Buyer with
respect to such Claim, then Buyer shall retain the defense thereof,
reimburse Seller and Delta for all their reasonable costs directly related
to the defense of such Claim (if any), including their reasonable costs
directly related to the arbitration, and shall pay the fees and expenses of
the arbitrator. The decision of the arbitrator will be final, conclusive
and binding on the parties to the arbitration, and no party will institute
any suit with regard to the dispute or controversy except to enforce the
award.
All costs incurred by Buyer in the defense, settlement or
compromise of such Claim shall, to the extent Seller and Delta would
otherwise be obligated to pay such costs, be reimbursed to Buyer by Seller
and Delta. If the Claim is one that cannot by its nature be defended
solely by Seller and Delta (including, without limitation, any federal or
state tax proceeding), then Buyer shall make available information and
assistance (but not financial assistance) reasonably required to defend the
Claim.
2. If By Buyer. Seller shall promptly notify Buyer in
-----------
writing of the existence of any claim, demand or other matter ("Claim") to
which, in Seller's reasonable judgment, Buyer indemnification obligations
hereunder would apply. Buyer shall thereafter have ten (10) business days
to determine whether, in its reasonable judgment, it is obligated to
indemnify Seller with respect to such claim. If Buyer determines, within
such ten (10) business day period, that it is so obligated, it shall notify
Seller of its determination thereof. Thereafter, Buyer, upon Seller's
request, shall assume the defense thereof, including retaining counsel
reasonably satisfactory to Seller to represent Seller, and shall pay the
fees and expenses of any such counsel related to such proceeding as well as
any fees or expenses incurred by Seller to the date of Buyer's assumption
of the defense. In any such proceeding, Seller shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of Seller.
If Buyer finds that it is not so obligated, or it fails to notify
Seller of Buyer's determination during such ten (10) business day period,
Buyer and Seller shall submit the issue of whether Buyer is obligated to
indemnify Seller with respect to such Claim, to binding arbitration to be
held in Louisville, Kentucky, in accordance with, and with a single
arbitrator to be selected under, the Commercial Arbitration Rules of the
American Arbitration Association as then in effect. The arbitrator so
selected shall use his or her best efforts to resolve this issue within
thirty (30) days after his or her selection. If the arbitrator determines
that Buyer is obligated to indemnify Seller with respect to such Claim,
then Buyer shall immediately assume the defense thereof, reimburse Seller
for all Seller's reasonable costs directly related to the defense of such
Claim, including Seller's reasonable costs directly related to the
arbitration, and shall pay the fees and expenses of the arbitrator. If the
arbitrator determines that Buyer is not obligated to indemnify Seller with
respect to such Claim, then Seller shall retain the defense thereof,
reimburse Buyer
21
for all Buyer's reasonable costs directly related to the defense of such
Claim (if any), including Buyer's reasonable costs directly related to the
arbitration, and shall pay the fees and expenses of the arbitrator. The
decision of the arbitrator will be final, conclusive and binding on the
parties to the arbitration and no party will institute any suit with regard
to the dispute or controversy except to enforce the award.
All costs incurred by Seller in the defense, settlement or
compromise of such Claim shall, to the extent Buyer would otherwise be
obligated to pay such costs, be reimbursed to Seller by Buyer. If the
Claim is one that cannot by its nature be defended solely by Buyer
(including, without limitation, any federal or state tax proceeding), then
Seller shall make available information and assistance (but not financial
assistance) reasonably required to defend the Claim.
D. Limitations of Indemnities.
--------------------------
1. Notwithstanding the provisions of Sections 8.A, 8.B and
8.C hereof, no payment shall be made by an indemnifying party to an
indemnified party based upon any claim of an indemnified party under this
Section 8 until the amount of all such claims (after deducting insurance
proceeds and third party recoveries paid to or for the benefit of the
indemnified party) shall total, in the aggregate of fifty thousand dollars
($50,000) for products liability and other liabilities (excluding
environmental and tax liabilities, which shall be fully reimbursed)(the
"Minimum Damages"), in which event only the amount of such claims of the
indemnified party in excess of the Minimum Damages (after deducting any
insurance proceeds and third party recoveries paid to or for the benefit of
the indemnified party) shall be subject to indemnification in accordance
with the terms of Sections 8.A, 8.B and 8.C hereof, but in no event shall
the aggregate of such claims exceed the Purchase Price, except in the case
of indemnification for tax liability, which shall be made without limit.
o. The parties' respective obligations to indemnify each
other under Sections 8.A, 8.B and 8.C hereof shall expire on the
following anniversaries of the Closing Date:
p. the applicable statute of limitations with respect to
all matters involving tax claims; and
q. the third (3rd) anniversary, with respect to all
other matters, (except those involving claims regarding environmental
matters, which shall have no time limit).
22
2. The parties hereto intend that the literal provisions
of Section 8.D shall give effect to the terms of the following table:
LIABILITY TERM LIMIT CAP
BASKET
Environmental None Purchase Price
$0
Product Liability 3 Years Purchase Price
$50,000*
Taxes Statute of Limitations None
$0
All Others 3 Years Purchase Price
$50,000*
* This is an aggregate total for product liabilities and all other
liabilities.
E. Remedies. The indemnification provisions set forth in
--------
this Article 8 shall be Seller's and Buyer's sole and exclusive remedy against
each other and Delta for any breach or misrepresentation of any covenant or
representation made herein; provided that, Seller and Buyer shall retain all
remedies at law or in equity in the event of any willful misconduct or
fraudulent act committed by the other party hereto in connection with the terms
of this Agreement.
9. Closing Documents.
-----------------
A. Provided By Buyer.
-----------------
1. Funds. Wire transfer of the full amount of the
-----
Purchase Price as set forth in Section 3.B.
2. Assumptions. Executed assignments of lease
-----------
agreements as specified in Schedule 2.A.1.a hereto and such other bills of
sale, assignments, other instruments and documents as shall be necessary to
vest in Buyer the Purchased Assets and to carry out the transactions
contemplated by the Agreement.
3. Secretary's Certificates. All resolutions of the
------------------------
Board of Directors of Buyer authorizing the transactions contemplated by
this Agreement, certified by the Secretary of Buyer.
4. Escrow Agreement. Executed Escrow Agreement
----------------
substantially in the form of Exhibit A attached hereto (the "Escrow
---------
Agreement").
5. Transition Services Agreement. Executed Transition
-----------------------------
Services Agreement substantially in the form of Exhibit B attached hereto
---------
(the "Transition Services Agreement").
6. Reseller Agreement. Executed Distributor Agreement
------------------
substantially in the form of Exhibit C attached hereto (the "Distributor
---------
Agreement").
7. Reciprocal Purchase Agreement. Executed Reciprocal
-----------------------------
Purchase Agreement substantially in the form of Exhibit D attached hereto
---------
(the "Reciprocal Purchase Agreement").
23
B. Provided By Seller.
------------------
1. Assignments and Bills of Sale. Executed Assignment
-----------------------------
and Xxxx of Sale in the form attached hereto as Exhibit E and executed
---------
assignments of lease agreements as specified in Schedule 2.A.1.a hereto and
such other bills of sale, assignments, other instruments and documents as
shall be necessary to vest in Buyer the Purchased Assets and to carry out
the transactions contemplated by the Agreement.
2. Secretary's Certificates. All resolutions of the
------------------------
Board of Directors of Seller, of Delta and of Impactdata (including as the
shareholder of Seller) authorizing the transactions contemplated by this
Agreement, certified by the Secretary of Seller and Delta.
3. Amendment of Articles. Seller and Delta shall
---------------------
deliver to Buyer executed Articles of Amendment to their Articles of
Incorporation as contemplated by Section 6.C.5.
4. Transition Services Agreement. Executed Transition
-----------------------------
Services Agreement.
5. Escrow Agreement. Executed Escrow Agreement.
----------------
6. Reseller Agreement. Executed Reseller Agreement.
------------------
7. Reciprocal Purchase Agreement. Executed Reciprocal
-----------------------------
Purchase Agreement.
8. Section 6.C Items. The other items required to be
-----------------
delivered by Seller at Closing pursuant to Section 6.C of this Agreement.
10. Miscellaneous.
-------------
A. Successor and Assigns. Except as otherwise provided in
---------------------
this Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder (including by operation of law) without the prior written
consent of the other parties hereto and any such attempted assignment without
such prior written consent shall be void and of no force and effect.
Notwithstanding the foregoing, Buyer may assign its rights and delegate its
obligations to one or more subsidiary or affiliated corporations of Buyer;
provided, however, that Buyer shall remain liable hereunder. This Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the parties hereto.
B. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California.
C. Expenses. Seller and Buyer will pay their respective costs
--------
and expenses, including the expenses of their accounting and legal
representatives, in connection with the origin, negotiation, execution and
performance of this Agreement.
D. Force Majeure. No party hereto shall be liable for any
-------------
failure of or delay in the performance of this Agreement for the period that
such failure or delay is due to acts of God, public enemy, civil war, strikes or
labor disputes or any other cause beyond the parties' reasonable control. Each
party agrees to notify the other party promptly upon the occurrence of any such
cause and to carry out this Agreement as promptly as practicable after such
cause is terminated.
E. Severability. If any part or provision of this Agreement
------------
shall be determined to be invalid or unenforceable by a court of competent
jurisdiction or any other legally constituted body having jurisdiction to make
such determination, such part or provision shall be valid and enforceable to the
maximum extent permitted by law and the remaining provisions of this Agreement
shall be fully effective.
24
F. Brokers' and Finders' Fees. Each of the parties represents
--------------------------
and warrants that it has dealt with no broker or finder in connection with any
of the transactions contemplated by this Agreement and no broker or other person
is entitled to any commission or finder's fee in connection with any of these
transactions.
G. Notices. All notices, requests, demands and other
-------
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given, (ii) on the day of transmission if sent by
facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(iii) on the day after delivery to Federal Express or similar overnight courier
or the Express Mail service maintained by the United States Postal Service, or
(iv) on the fifth (5th) day after mailing, if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid
and properly addressed, to the party as follows:
If to Seller or Delta Tango, Inc.
Delta: 0000 Xxxxxx Xxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. M. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer: Metrum-D, Inc.
c/o Group Financial Partners, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for the purpose of this Section 11.G
by giving the other party notice of its new address in the manner set forth
above.
H. Amendments; Waivers. This Agreement may be amended,
-------------------
modified, superseded or canceled, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, only by written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. Any waiver by any party of any condition, or of the
breach of any provision, term, covenant, representation or warranty contained in
this Agreement, in any one or more instances, shall not be deemed to be nor
construed as further or continuing waiver of any such condition, or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.
I. Entire Agreement. This instrument and the exhibits and
----------------
schedules referred to herein contain the entire agreement of the parties hereto
with respect to the sale and purchase of the Purchased Assets and the other
transactions contemplated herein, and any reference herein to this Agreement
shall be deemed to include the exhibits and schedules attached hereto. All oral
or written agreements, statements, representations, warranties, and
understandings with respect to the subject matter of this Agreement made or
entered into by the parties prior to or contemporaneously with the execution of
this Agreement are hereby rendered null and void and are merged herewith.
J. Further Matters. Each party agrees to execute such further
---------------
instruments of assignment and transfer and to perform such additional acts as
are necessary to consummate the transactions contemplated by this Agreement.
K. Parties in Interest. Nothing in this Agreement is intended
-------------------
to confer, or confers, any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns. Nothing in this Agreement is intended to, or does,
relieve or discharge the
25
obligations or liability of any third persons to any party to this Agreement. No
provision of this Agreement shall give any third persons any right of
subrogation or action over or against any party to this Agreement.
L. Survival. The representations, warranties and covenants of
--------
the parties set forth herein shall survive the Closing date of this Agreement
for the periods set forth in Section 8.D hereof.
M. Section and Paragraph Headings. The section and paragraph
------------------------------
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
N. Counterparts. This Agreement may be executed in several
------------
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
O. Knowledge of Breach. In the event that Buyer has actual
-------------------
knowledge prior to Closing that Seller has breached any representation or
warranty set forth herein, Buyer shall notify Seller of such breach.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"Seller"
DATATAPE INCORPORATED
By: /s/ X.X. Xxxxxx
--------------------------------
Title: President
"Delta"
DELTA TANGO, INC.
By: /s/ X.X. Xxxxxx
--------------------------------
Title: President
"Impactdata"
IMPACTDATA, INC.
By: /s/ X.X. Xxxxxx
--------------------------------
Title: President
"Xxxxxx"
/s/ X. X. Xxxxxx
--------------------------------
M. XXXXXX XXXXXX
"Buyer"
METRUM-D, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President
26
