EXHIIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of December
19, 2007, is made by and among TT ACQUISITION, LLC, a Delaware limited
liability company ("Buyer"), AMERICAN TONERSERV CORP., a Delaware corporation
("ATS"), TONERTYPE OF FLORIDA, LLC, a Florida limited liability company
("Seller"), and XXXXX X. XXXXXX and XXXXX X. XXXXXX (together, "Selling
Members").
RECITALS
A. Seller is engaged in the business of print management, printing
supplies, repair services, total laser care, and printer and cartridge
remanufacturing (the "Printer Business"), which is located at 0000 Xxxxx
Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx (the "Premises").
B. Selling Members own directly or indirectly the entire outstanding
membership interest of Seller.
C. Buyer is a wholly-owned subsidiary of ATS.
D. Seller and Selling Members desire to sell and Buyer desires to
purchase certain assets of the Printer Business, on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used herein shall have the meanings
ascribed thereto in this Agreement, a list of which is included in the
Schedule of Definitions attached hereto as Schedule 1.
2. Sale and Purchase of Assets. Seller shall sell, transfer, convey,
assign and deliver to Buyer, and Buyer shall purchase from Seller, on the
Closing Date (as defined in Section 8 hereof) all of Seller's right, title
and interest in and to all of the assets and rights (the "Purchased Assets")
of every type and description, used in or relating to the Printer Business,
whether tangible or intangible, real, personal or mixed, wherever located and
whether or not reflected on the books and records of Seller, including,
without limitation, the following assets and rights:
2.1. Equipment. The furniture, fixtures, equipment, motor
vehicles, machines, tools, inventory, supplies, leasehold improvements, trade
fixtures, and other tangible assets which are owned by Seller and used
primarily or exclusively in Seller's operation of the Printer Business as of
the Closing Date (collectively, "Equipment"), including, without limitation,
the Equipment set forth on the Schedule of Equipment attached hereto as
Schedule 2.1. Without limiting the generality of the foregoing, the
Equipment shall include the following: (i) the service trucks, machinery,
and equipment used in the remanufacturing facility; (ii) the office
furniture, computers, printers, copiers, fax machines, and other equipment
used in the operation of the Printer Business; (ii) the equipment, computers,
hand-held computers, mobile phones, and tools normally carried on the service
trucks; (iii) the entire fleet of vehicles (trucks, vans and other vehicles),
including, without limitation, the vehicles set forth on the schedule of
vehicles included in the Schedule of Equipment; (iv) the technicians' and
other truck-based service equipment; (v) the printers rented or borrowed, or
intended to be rented or borrowed, by customers of the Printer Business.
2.2. Inventory. All inventory, wherever located, including raw
materials, work-in-process, packaging, finished goods, spare parts and shop
and production supplies of the Printer Business as of the Closing Date
("Inventory"), including without limitation, the Inventory set forth on the
Schedule of Inventory attached hereto as Schedule 2.2 which shall be prepared
following a joint physical inventory to be conducted within 48 hours of the
Closing and shall be attached to, and become part of, this Agreement as of
the Closing.
2.3. Customers and Goodwill. All rights to solicit and service
Seller's customers and potential customers of the Printer Business as of the
Closing Date, together with all goodwill related thereto, and all lists,
records, files, marketing materials, and billing histories associated
therewith.
2.4. Telephone and Facsimile Numbers. All of Seller's rights to
the telephone number(s) and the facsimile number(s) of the Printer Business
as of the Closing Date, to the extent assignable.
2.5. Intellectual Property. All Intellectual Property (as
defined below) of the Printer Business as of the Closing Date, including,
without limitation, the Intellectual Property set forth in the Schedule of
Intellectual Property attached hereto as Schedule 2.5, but excluding the
Service Xxxx (as defined in Section 9.26) that is subject to the License
Agreement (as defined in Section 11.9). Part A of the Schedule of
Intellectual Property sets forth the Intellectual Property owned by Seller
and Selling Members and Part B of the Schedule of Intellectual Property sets
forth the Intellectual Property licensed from third parties.
As used in this Agreement, "Intellectual Property" shall mean any
and all intellectual property rights recognized in any country or
jurisdiction in the world including, without limitation, trade names,
trademarks (including common-law trademarks), service marks, domain names and
internet content (including websites), art work, packaging, logos, all
domestic and foreign copyrights, the respective registrations and
applications for any of the foregoing, all domestic and foreign patents,
their applications and registrations, all technology, know-how, trade
secrets, formulas, drawings, designs, systems, source code, object code,
design documents, test documents, technical manuals, customer lists, product
information, development work-in-progress. Intellectual Property includes
all goodwill associated with all of the foregoing.
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2.6. Leasehold Interests. All of Seller's leasehold interests
(i) in personal property leased to Seller, including, without limitation, all
leases or rental agreements covering any Equipment; and (ii) as lessee of the
Premises under the Lease (as defined below) and any other Leased Real
Property (as defined in Section 9.6 hereof), including any leasehold
improvements located thereon.
2.7. Accounts Receivable. All accounts receivable, notes
receivable, negotiable instruments, and chattel paper (collectively, the
"Accounts Receivable") of the Printer Business as of the Closing Date.
2.8. Permits. All Permits (as defined in Section 9.23 hereof) to
the extent assignable or transferable.
2.9. Contract Rights, and Other Intangible Assets. All of
Seller's right, title, and interest in, to, and under the Contracts (as
defined in Section 9.20 hereof), and all warranties, guarantees, and service
contracts relating to any Equipment as of the Closing Date.
2.10. Books and Records. All books and records (including all
discs, tapes, and other media-storage data and information) of the Printer
Business as of the Closing Date, other than the organizational records of
Seller described in clause (ii) of Section 3 hereof.
2.11. Other Records, Manuals and Documents. All mailing lists,
customer lists, billing histories, supplier lists, vendor data, marketing
information and procedures, sales and customer files, advertising and
promotional materials, current product material, equipment maintenance
records, warranty information, records of plant operations and the source and
disposition of materials used and produced in such plants, standard forms of
documents, manuals of operations or business procedures and other similar
procedures, and all other information of the Printer Business as of the
Closing Date.
2.12. Insurance Proceeds. All insurance proceeds paid or payable
to Seller in respect of any damage to or destruction or loss of any assets or
rights of Seller reflected on any of the Schedules referred to in this
Section 2, including any assets of Seller that, as far as could reasonably be
foreseen, would have been included in the Purchased Assets but for such
damage, destruction or loss.
3. Excluded Assets. Excluded from the definition of Purchased Assets
and the purchase and sale hereunder, and specifically retained as the
property of Seller after the Closing Date, are the following (the "Excluded
Assets"): (i) all cash and cash equivalents on hand as of the Closing Date,
subject to payment of any net working capital adjustment contemplated by
Section 7.3 hereof that exceeds the Holdback Amount (as defined in Section
7.2(a)); (ii) books and records of Seller that do not relate to the
operations of the Printer Business, including the articles of organization,
operating agreement, and other records having exclusively to deal with the
organization and capitalization of Seller; and (iii) the Excluded Assets
described in the Schedule of Excluded Assets attached hereto as Schedule 3.
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4. Assumption of Liabilities.
4.1. Assumed Liabilities. At the Closing (as defined in Section
8 hereof) and upon the terms and conditions contained in this Agreement and
the Assumption Agreement (as defined in Section 6 hereof), Buyer shall assume
and agree to discharge and perform the following (and only the following)
liabilities of Seller (the "Assumed Liabilities"):
(a) Trade Payables. All current trade accounts payable of Seller
outstanding as of the Closing Date, but only to the extent such payables (i)
were incurred in the ordinary course of business consistent with past
practice; and (ii) do not result from any failure to pay when and as due or
any other breach of the terms and conditions of any agreement (written or
oral) by and between Seller and the vendor or supplier to which such payable
is due, including, without limitation, any penalties, late charges or
interest accrued on or before the Closing Date.
(b) Accrued Sales Tax. All accrued sales tax payable of Seller
outstanding as of the Closing Date, but only to the extent such accrued sales
tax (i) was collected as a result of taxable sales in the ordinary course of
business consistent with past practice; and (ii) does not result from any
failure to remit sales tax as and when due (specifically excluding, without
limitation, any penalties or interest accrued on or before the Closing Date).
(c) Lease. Liabilities of Seller accruing from and after the
Closing Date under that certain lease of the Premises (the "Lease"), dated as
of September 14, 2005, by and between Seller and First Industrial, L.P.
("Landlord"), but only to the extent such liabilities do not result (i) from
any failure to pay when and as due or any other breach of the terms and
conditions of such Lease, including, without limitation, any penalties, late
charges or interest accrued on or before the Closing Date; or (ii) from any
payment or other consideration, including, without limitation, any attorneys
fees or costs, required to be paid to Landlord, if any, in connection with
the assignment of the Lease to Buyer as required by this Agreement.
(d) Customer Contracts. Liabilities of Seller under any written
Contract with a customer of the Printer Business by which Seller is bound on
the Closing Date, which (i) was made in the ordinary course of business
consistent with past practice, (ii) was disclosed in the Schedule of
Contracts attached hereto as Schedule 9.20, and (iii) is assigned to Buyer
pursuant to this Agreement, in each case to the extent such liabilities
relate to performance on or after the Closing Date and do not result from any
breach of contract, breach of warranty, tort, claim or lawsuit arising on or
before the Closing Date.
(e) GMAC Loan. Liabilities of Seller, not to exceed $44,000 in
the aggregate, under that certain loan from GMAC (the "GMAC Loan") relating
to the purchase of the 2007 Chevy Suburban, including outstanding principal
as of the Closing Date and interest that accrues from and after the Closing
Date, but only to the extent such liabilities do not result from any failure
to pay when and as due or any other breach of the terms and conditions of
such GMAC Loan, including, without limitation, any penalties, late charges or
interest accrued on or before the Closing Date.
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4.2. Excluded Liabilities. Other than the Assumed Liabilities,
Buyer shall have no responsibility whatsoever with respect to any
liabilities, contracts, commitments, and other obligations of Seller or the
Printer Business of any nature or kind, liquidated or contingent, whether or
not incurred in the ordinary course of business, including, without
limitation, which shall remain obligations and liabilities of Seller (the
"Excluded Liabilities"): (i) accrued expenses as of the Closing Date,
including, without limitation, salaries, vacation accrual, severance
liabilities, bonus and commission accrual and deductions payable, and other
employee-related liabilities; (ii) notes payable (other than the GMAC Loan);
(iii) liabilities for Taxes (as defined below) either accruing or relating to
the periods before the Closing Date; (iv) claims, liabilities, or other
obligations that relate to injuries, actions, omissions, conditions or events
that occurred or existed on or prior to the Closing Date, including, without
limitation, any such claims or events that are listed in Schedule 9.25, and
any liabilities for any claim, judgment, penalty, settlement agreement or
other obligation to pay in respect of any such claims or events; (v)
liabilities for Environmental Matters (as defined in Section 9.18); or (vi)
liabilities relating to any of the provisos or exceptions described in
Sections 4.1(a), (c), (d), or (e) hereof.
As used in this Agreement, "Tax" shall mean all taxes, charges,
fees, levies or other assessments, including, without limitation, income,
excise, gross receipts, personal property, real property, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, severance, stamp, occupation, windfall profits, social security
and unemployment or other taxes imposed by the United States or any agency or
instrumentality thereof, any state, county, local or foreign government, or
any agency or instrumentality thereof, and any interest or fines, and any and
all penalties or additions relating to such taxes, charges, fees, levies or
other assessments.
5. Taxes and Expenses; Apportionment.
5.1. Transfer Taxes. Buyer and Seller shall each be responsible
for the payment of one-half (1/2) of all transfer, sales and use, and
documentary Taxes, filing and recordation fees, if any, and similar charges
relating to the sale or transfer of the Purchased Assets hereunder.
5.2. Transaction Expenses. Each party shall be responsible for
its own costs and expenses incurred in connection with the preparation,
negotiation and delivery of this Agreement and any documents or instruments
related hereto, including, without limitation, attorneys' and accountants'
fees and expenses.
5.3. Apportionments. Any and all Taxes (other than as described
in Section 5.1 hereof), assessments, lease rentals (including, without
limitation, any utilities, additional rent, insurance, Taxes (including sales
taxes) and common area maintenance charges), fuel, and other charges
applicable to the Purchased Assets shall be pro-rated to the Closing Date,
and such Taxes and other charges shall be allocated between the parties by
adjustment at the Closing, or as soon thereafter as the parties may agree.
All such Taxes shall be allocated on the basis of the fiscal year or other
applicable time frame of the tax jurisdiction in question.
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6. Instruments of Sale and Transfer. On or prior to the Closing Date,
Seller shall deliver to Buyer and Buyer shall deliver to Seller, as the case
may be, such instruments of sale and assignment as shall, in the reasonable
judgment of Buyer and Seller, be effective to vest in Buyer on the Closing
Date all of Seller's right, title and interest in and to the Purchased Assets
and to evidence the assumption of the Assumed Liabilities by Buyer,
including, without limitation, a Xxxx of Sale, substantially in the form
attached hereto as Exhibit A (the "Xxxx of Sale"), and an Assignment and
Assumption Agreement, substantially in the form attached hereto as Exhibit B
(the "Assumption Agreement"). Seller shall take all reasonable additional
steps as may be necessary to put Buyer in possession and operating control of
the Purchased Assets at the Closing, and Buyer shall take all reasonable
additional steps as may be necessary for it to assume the Assumed Liabilities
at the Closing.
7. Purchase Price.
7.1. Purchase Price. Subject to adjustment as provided below,
the aggregate purchase price (the "Purchase Price") to be paid by Buyer to
Seller for the Purchased Assets, including the sole consideration for the
Noncompetition Agreement (as defined in Section 11.6 hereof), shall be Four
Million Dollars ($4,000,000), plus the assumption of the principal balance of
the GMAC Loan outstanding as of the Closing Date; provided, however, the
Purchase Price shall not exceed Four Million Forty-four Thousand Dollars
($4,044,000) in the aggregate.
7.2. Payment of the Purchase Price. The Purchase Price shall be
paid by Buyer to Seller as follows:
(a) Deposit. Upon execution and delivery of this Agreement,
Buyer shall deposit Twenty-five Thousand Dollars ($25,000) (the "Deposit
Amount") with Seller's counsel, Akerman Senterfitt, in its capacity as escrow
agent ("Escrow Agent"), to be credited to the Purchase Price at the Closing,
or released to Seller upon termination of this Agreement pursuant to Section
14.1(e) hereof.
(b) Cash Portion. At the Closing, Buyer shall deliver to Seller,
by wire transfer in accordance with instructions provided by Seller, the
amount of One Million Two Hundred Seventy-five Thousand Dollars ($1,275,000)
(the "Cash Portion").
(c) Holdback Deposited Into Escrow At the Closing, Buyer shall
deposit Two Hundred Thousand Dollars ($200,000) (the "Holdback Amount") with
Escrow Agent, to be held in escrow pursuant to the Escrow Agreement attached
hereto as Exhibit C (the "Escrow Agreement") to fund any adjustment required
by Section 7.3 hereof. The Holdback Amount, less any downward adjustment
contemplated by Section 7.3 hereof, shall be paid to Seller in accordance
with the provisions of Section 7.3.
(d) Installment Notes. At the Closing, Buyer and ATS, as co-
obligors, shall deliver to Seller the following promissory notes
(collectively, the "Notes"):
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(1) Convertible Note. A non-interest bearing Convertible
Contingent Promissory Note, substantially in the form attached hereto as
Exhibit D-1 (the "Convertible Note"), made payable to Seller in the principal
amount of Five Hundred Thousand Dollars ($500,000), subject to adjustment as
provided in Section 7.4 hereof, with a maturity date that is two (2) years
after the Closing Date. On the maturity date, the Convertible Note shall
automatically convert into that number of shares of common stock of ATS (the
"Common Stock") that is equal to the quotient obtained by dividing (i) the
aggregate outstanding principal balance due on the Convertible Note, by (ii)
the average of the closing bid and asked prices of the Common Stock quoted in
the over-the-counter market in which the Common Stock is traded for the five
(5) trading days prior to the Closing Date (the "Conversion Price");
provided, however, that the Conversion Price shall not be less than $0.20 per
share nor more than $0.70 per share. The Conversion Price shall be adjusted
proportionately for any stock splits or subdivisions, stock dividends, or
stock combinations, as more fully described in the Convertible Note. The
shares issued upon conversion of the Convertible Note shall have piggyback
registration rights. The Convertible Note shall be subject to acceleration
upon the occurrence of a Buyer Default (as defined in Section 7.2(d)(4)), and
shall be secured. The principal amount of the Convertible Note shall be
offset by an amount equal to (i) any downward adjustment contemplated by
Section 7.3 hereof or Section 7.4 hereof, and (ii) any Damages (as defined in
Section 13.2 hereof) sustained by Buyer, provided that any offset for Damages
shall be subject to the provisions of Section 13.5.
(2) Installment Note. An Installment Promissory Note,
substantially in the form attached hereto as Exhibit D-2 (the "Installment
Note"), made payable to Seller in the principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000), bearing interest at the rate of five
percent (5%) per annum, with a maturity date that is thirty-six (36) months
after the Closing Date. The Installment Note shall be payable in thirty-six
(36) equal monthly installments of principal and interest, based on a sixty
(60) month amortization, with the unpaid principal balance due and payable in
full on the maturity date. The principal amount and any accrued interest of
the Installment Note shall be offset by an amount equal to (i) any downward
adjustment contemplated by Section 7.3 hereof or Section 7.4 hereof, and (ii)
any Damages sustained by Buyer; provided, however, the Installment Note shall
be offset only and to the extent that the principal balance of the Contingent
Note has been reduced to zero; and provided further that any offset for
Damages shall be subject to the provisions of Section 13.5 hereof; and
provided further that any offset against the Installment Note shall not
exceed One Hundred Thousand Dollars ($100,000).
(3) Short-term Note. A Short-term Promissory Note,
substantially in the form attached hereto as Exhibit D-3 (the "Short-term
Note"), made payable to Seller in the principal amount of Five Hundred
Thousand Dollars ($500,000), bearing interest at the rate of five percent
(5%) per annum, with a maturity date that is one hundred twenty (120) days
after the Closing Date. The Short-term Note shall be payable in full on the
maturity date.
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(4) Buyer Defaults Defined; Cross-Default. Each of the
Notes shall provide for acceleration by the holder upon the occurrence of any
of the following events of default (each a "Buyer Default"), which is not
cured (if curable) within the cure periods set forth below:
(i) Buyer or ATS shall fail to timely make any payment
due under any of the Notes, and such non-payment shall not be cured within
ten (10) business days of Seller's giving written notice of such default in
the manner set forth in Section 15.1; or
(ii) Buyer or ATS shall (1) admit in writing its
inability to pay its debts generally as they become due, (2) file a petition
in bankruptcy, (3) make an assignment for the benefit of creditors, or (4)
become insolvent; or
(iii) Buyer or ATS is dissolved or liquidated; or
(iv) Buyer, without the consent of Seller (which may be
withheld only if Seller reasonably determines that such transaction impairs
the prospects for repayment of the Notes), sells all or substantially all of
its assets or enters into a merger, consolidation, or similar corporate
reorganization; or
(v) ATS, without the consent of Seller (which may be
withheld only if Seller reasonably determines that such transaction impairs
the prospects for repayment of the Notes), sells Buyer; or
(vi) The group consisting of Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxx sell to unrelated
third parties an aggregate of 10 million or more shares of common stock or
securities convertible into common stock (with common stock equivalents
computed in the same manner as reflected in the Company's annual reports
filed with the United States Securities and Exchange Commission (the "SEC"),
provided that such number shall be adjusted for any stock splits,
combinations, or the like, as more fully described in, and to be determined
in accordance with, Section 4(c) of the Convertible Note; or
(vii) Buyer or ATS shall have received notice of
default, which default remains uncured for thirty (30) days following notice
thereof, from any commercial lender having a loan or line of credit with a
principal balance in excess of $1,000,000; or
(viii) Buyer or ATS shall have been notified by one or
more of the Significant Suppliers (as defined in Section 9.27), which
together represent 33% or more of monthly purchases, that future sales will
be made only on a COD basis, and Buyer or ATS shall have not been successful
in restoring usual and customary credit terms or credit terms that are
substantially similar thereto within twenty (20) days of written notice from
Seller.
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A default under any of the Notes shall constitute a default
under each of the other Notes. Upon the occurrence of a Buyer Default,
subject to applicable notice and cure periods, if any, Seller and Selling
Members shall be entitled to the following remedies (the "Seller's
Remedies"): (i) Selling Members shall be entitled to terminate their
respective Selling Member Employment Agreements with Buyer or ATS for Good
Reason (as defined in such agreements), (ii) the Noncompetition Agreement
shall terminate; (iii) the license granted to Buyer under the License
Agreement shall terminate; and (iv) Buyer and ATS shall assign to Seller and
Selling Members all of Buyer's rights in and to the following, each of which
is being assigned to Buyer under this Agreement: (A) the domain name
"xxx.xxxxxxxxx.xxx" and the associated website; (B) the telephone and
facsimile numbers of Seller; (C) all email addresses with the "tonertype"
domain; and (D) its license to the e-Automate by Digital Gateway software
package.
(5) Nonrecourse. Notwithstanding any other provision of this
Agreement to the contrary, each of the Notes are nonrecourse as to Buyer and
ATS. In the event Seller and/or Selling Members are entitled to proceed
against Buyer and/or ATS, Seller and/or Selling Members' sole recourse shall
be to enforce the Seller's Remedies. Seller and/or Selling Members shall
have no other recourse against Buyer and/or ATS or any assets of Buyer and/or
ATS. This provision is not intended to constitute a discharge or release of
any obligation contained in the Notes, but is a covenant by Seller and
Selling Members not to xxx Buyer and/or ATS for a deficiency. Nothing herein
is intended to limit the rights of Seller and Selling Members under the last
paragraph of Section 7.2(d)(4) to enforce the Seller's Remedies.
7.3. Net Working Capital Adjustment.
(a) Net Working Capital Adjustment. The Purchase Price
shall be adjusted as follows: (i) in the event that the Net Working Capital
(as defined below) as of the Closing Date exceeds the Net Working Capital
Threshold (as defined below), then the Purchase Price shall be adjusted
upward by an amount equal to such excess, in which case Buyer shall promptly,
but in any event within five (5) business days following the determination in
accordance with Section 7.3(b) hereof, pay Seller the Holdback Amount plus
such excess amount; or (ii) in the event that the Net Working Capital as of
the Closing Date is less than the Net Working Capital Floor (as defined
below), then the Purchase Price shall be adjusted downward in an amount equal
to such deficiency, in which case Buyer shall promptly, but in any event
within five (5) business days following the determination in accordance with
Section 7.3(b) hereof, pay Seller the Holdback Amount less such amount;
provided, however, if the amount of such deficiency exceeds the Holdback
Amount, Buyer shall offset the amount by which such deficiency exceeds the
Holdback Amount against the Convertible Note (or the Installment Note, in the
event that such amount exceeds the principal balance of the Convertible
Note).
(b) Determination of Net Working Capital. Seller shall
deliver to Buyer, at Closing, a statement (the "Closing Balance Sheet")
setting forth its computation of the Net Working Capital. The Closing
Balance Sheet shall be prepared in accordance with generally accepted
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accounting principles consistently applied, and shall only reflect the
Purchased Assets and Assumed Liabilities constituting Net Working Capital.
The Closing Balance Sheet shall become final and binding upon the parties the
earlier of (i) the date Buyer gives written notice to Seller that Buyer
agrees with and accepts the computation of Net Working Capital set forth in
the Closing Balance Sheet, or (ii) thirty (30) days following the Closing
unless Buyer gives written notice of its disagreement ("Dispute Notice") to
Seller prior to such date. Buyer shall have such thirty (30)-day period to
bring a dispute, but only on the basis that the amounts reflected on the
Closing Balance Sheet were not presented in accordance with generally
accepted accounting principles or were inaccurate or incomplete. Within
thirty (30) days after delivery of such Dispute Notice, the parties hereto
shall attempt to resolve such dispute and agree in writing upon the final
content of the disputed Closing Balance Sheet. If Buyer and Seller are
unable to resolve any dispute within the thirty (30)-day period after
Seller's receipt of a Dispute Notice, Seller and Buyer shall jointly engage
as arbitrator an accounting firm acceptable to and jointly engaged by both
Buyer and Seller, provided such accounting firm has not performed accounting,
tax or auditing services for Buyer or Seller or any of their respective
Affiliates during the past three (3) years (the "Arbitrating Accountant").
The Arbitrating Accountant shall promptly, and in any event within forty-five
(45) days after the date of its appointment, determine, based solely on
presentations by Buyer and Seller, and not by independent review, only those
issues in dispute and shall render a written report as to the dispute and the
resulting computation of the Closing Balance Sheet and the Net Working
Capital, which shall be conclusive and binding upon the parties and not
subject to appeal or judicial review. In resolving any disputed item, the
Arbitrating Accountant may not assign a value to any item greater than the
greatest value for such item claimed by either party or less than the
smallest value for such item claimed by either party. Upon the resolution of
all such disputes, the Closing Balance Sheet shall be revised to reflect such
resolution. The Arbitrating Accountant shall determine the proportion of its
fees and expenses to be paid by each of Seller and Buyer, based primarily on
the degree to which the Arbitrating Accountant has accepted the positions of
the respective parties.
(c) Definitions. As used in this Agreement, the following
terms shall have the following meanings:
(1) "Net Working Capital" shall mean (i) the Purchased
Assets which are treated under generally accepted accounting principles as
current assets (exclusive of cash on hand and cash equivalents constituting
Excluded Assets); minus (ii) the Assumed Liabilities which are treated under
generally accepted accounting principles as current liabilities, determined
in the manner set forth in Section 7.3(b) hereof.
(2) "Net Working Capital Floor" shall mean Four Hundred
Forty-eight Thousand Eight Hundred Sixteen Dollars ($448,816), which amount
is 90% of the Net Working Capital Target.
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(3) "Net Working Capital Target" shall mean Four
Hundred Ninety-eight Thousand Six Hundred Eighty-five Dollars ($498,685),
which amount is equal to the average month-end Net Working Capital for the
four (4)-month period ending on April 30, 2007 (excluding the Excluded Assets
which are treated under generally accepted accounting principles as current
and the Excluded Liabilities which are treated under generally accepted
accounting principles as current)
(4) "Net Working Capital Threshold" shall mean Five
Hundred Forty-eight Thousand Five Hundred Fifty-three Dollars ($548,553),
which amount is 110% of the Net Working Capital Target.
7.4. Contingent Adjustment.
(a) Contingent Adjustment. The principal amount of the
Convertible Note (or the Installment Note, in the case of a downward
adjustment that exceeds the principal balance of the Convertible Note) shall
be adjusted as follows: (i) in the event that the aggregate EBITDA (as
defined below) for the Contingent Period (as defined below) exceeds the Bonus
Threshold (as defined below), the principal amount of the Convertible Note
shall be adjusted upward by an amount equal to 50% of such amount in excess
of the Bonus Threshold; or (ii) in the event that the aggregate EBITDA for
the Contingent Period is less than the Trigger Amount (as defined below), the
principal balance of the Convertible Note shall be adjusted downward by an
amount equal to such deficiency.
(b) Definitions. As used in this Agreement, the following
terms shall have the following meanings:
(1) "EBITDA" shall mean, for any period, the aggregate
net income of Buyer (determined in accordance with generally accepted
accounting principles) for such period plus, to the extent deducted in
computing such net income, without duplication, the sum of (i) interest
expense, (ii) income tax expense or, if imposed by any relevant jurisdiction
in lieu of an income tax, franchise and/or gross receipts tax expense, (iii)
depreciation and amortization expense, (iv) amortization of intangibles
(including, but not limited to, goodwill), and (v) other non-cash items
decreasing net income; and minus, to the extent added in computing such net
income, without duplication, the sum of (A) interest income, (B)
extraordinary nonrecurring gains and (C) other non-cash items increasing net
income.
(2) "Contingent Period" shall mean the eighteen (18)-
month period immediately following the Closing Date.
(3) "Target Amount" shall mean One Million Two Hundred
Thirteen Thousand Two Hundred Dollars ($1,213,200).
(4) "Bonus Threshold" shall mean One Million Three
Hundred Thirty-four Thousand Five Hundred Twenty Dollars ($1,334,520), which
amount is 110% of the Target Amount.
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(5) "Trigger Amount" shall mean One Million Ninety-one
Thousand Eight Hundred Eighty Dollars ($1,091,880), which amount is 90% of
the Target Amount.
(c) Computation of Net Income of Buyer. The calculation of
EBITDA shall be computed in a manner which treats Buyer as a separate profit
and cost center, distinct from ATS and other Affiliates (as defined in
Section 9.22) of ATS. The EBITDA shall be computed without regard to any ATS
general and administrative overhead allocation; provided, however, any direct
expenses or costs paid by ATS on behalf of Buyer will be included in the
calculation of EBITDA. Without the consent of Selling Members, which consent
shall not be unreasonably withheld, Buyer shall not outsource any
manufacturing functions of the Printer Business currently conducted by
Seller, or discontinue purchases of raw material from vendors currently used
by Seller unless equivalent or higher quality raw materials can be purchased
from another vendor on terms not less favorable. Inventory items transferred
from ATS and its Affiliates to Buyer shall be accounted for at the lower of
ATS cost or market (and Selling Members, as President and Chief Executive
Officer, respectively, of Buyer, shall have the authority to refuse any
inventory proposed to be transferred from ATS and its Affiliates to Buyer, or
inventory which is purchased from a third party pursuant to a group
purchasing contract entered into by ATS or its Affiliates if Selling Members,
as President and Chief Executive Officer, respectively, of Buyer, determine
that equivalent or higher quality inventory can be purchased from another
vendor on terms not less favorable). Inventory items transferred from Buyer
to ATS or its Affiliates for resale by ATS or an Affiliate shall be accounted
for at a mutually agreed upon competitive wholesale price. For purposes of
this Section 7.4, Buyer shall be credited with all sales to any customers
assigned by Seller to Buyer, without regard to whether ATS or an Affiliate of
ATS made or billed the sale. For purposes of calculating EBIDTA, in the
event that Buyer significantly reduces the level of purchases of goods or
services from either Colonial Bank or Southeastern Companies PEO, and such
customer reduces its purchases of goods and services from Buyer,
notwithstanding the reduction in sales, Buyer shall be given credit for sales
revenues from such customer equal to the sales revenues from such customer
for the most recent period prior to the Closing.
(d) Examples. The following examples are designed to be
illustrative of this Section 7.4, and shall not be interpreted as a
limitation:
(1) If EBITDA for the Contingent Period is $1,500,000,
then the Convertible Note will be adjusted upward by $82,740 (50% of the
difference between $1,500,000 and the Bonus Threshold of $1,334,520).
(2) If EBITDA for the Contingent Period is $1,250,000,
then the Convertible Note will not be adjusted upward or downward ($1,250,000
does not exceed the Bonus Threshold nor is it less than the Trigger Amount).
(3) If EBITDA for the Contingent Period is $1,000,000,
then the Convertible Note will be adjust downward by $91,880 (the difference
between $1,000,000 and the Trigger Amount of $1,091,880).
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(e) EBITDA Adjustment Event. Notwithstanding any other
provision of this Section 7.4 to the contrary, in the event that ATS or any
of its Affiliates acquires another printer business that ATS, Buyer and
Selling Members agree to consolidate with the Printer Business (an "EBITDA
Adjustment Event"), ATS, Buyer and Selling Members shall mutually agree in
writing in advance on an adjustment to the Target Amount and in the
calculation of EBITDA to be used from and after the date of such EBITDA
Adjustment Event in order to reflect the additional revenue resulting from
such EBITDA Adjustment Event.
7.5. Allocation of Purchase Price. The Purchase Price shall be
allocated in a manner intended to comply with the allocation method required
by section 1060 of the Internal Revenue Code of 1986, as amended (the
"Code"). The parties shall cooperate to comply with all substantive and
procedural requirements of section 1060 of the Code and any regulations
thereunder, and the allocation shall be adjusted if, and to the extent
necessary, to comply with the requirements of section 1060 of the Code.
Neither Buyer nor Seller shall take, or permit any affiliated person to take,
for federal, state, or local income tax purposes, any position inconsistent
with the allocation set forth below, or if applicable, such adjusted
allocation. Seller and Buyer shall attach to their tax returns for the tax
year in which the Closing shall occur an information statement on Form 8594,
which shall be completed in accordance with the allocations set forth on the
Purchase Price Allocation attached hereto as Schedule 7.5. Notwithstanding
any other provision of this Agreement to the contrary, in no event shall any
portion of the Purchase Price be allocated or be deemed to be allocated as
consideration to Seller for the assignment of the Lease.
7.6. Additional Consideration Stock. As additional consideration
to Selling Members, ATS agrees to issue to Selling Members One Hundred
Eighty-six Thousand (186,000) shares of ATS common stock (the "Additional
Consideration Stock"). Stock certificates representing one-half (1/2) (or
such other proportion as Selling Members may determine and instruct ATS prior
to the Closing Date) of the Additional Consideration Stock shall be delivered
to each Selling Member promptly following the Closing.
8. Closing. Subject to satisfaction or waiver of the conditions to
closing set forth herein, the closing of the transactions contemplated by
this Agreement (the "Closing") shall take place as soon as possible but in
any event not later than at 2:00 p.m. (Eastern Time) on December 28, 2007
(the "Closing Date"), at the office of Akerman Senterfitt, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, or at such other time, date and
place as may be mutually agreed upon.
9. Representations and Warranties of Seller and Selling Members.
Seller and Selling Members hereby, jointly and severally, represent and
warrant to Buyer that:
9.1. Organization. Seller is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State
of Florida and has all requisite power and authority to carry on the Printer
Business as presently conducted. Seller is duly qualified or licensed to do
13
business and is in good standing in each jurisdiction in which the nature of
its business or its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed would not have a material adverse effect on Seller.
9.2. Capitalization. Selling Members are the sole owners of the
entire membership interest and economic interest of Seller.
9.3. Authority; Enforceability. Seller has full power and
authority to execute and deliver this Agreement and the Transaction Documents
(as defined below) to which it is a party, and to perform its obligations
hereunder and thereunder. Selling Members has all requisite capacity, power
and authority to execute and deliver this Agreement and each of the
Transaction Documents to which they are a party and to perform their
obligations hereunder and thereunder. This Agreement and the Transaction
Documents to which they are a party constitute the valid and legally binding
obligations of Seller or Selling Members, as the case may be, enforceable in
accordance with their respective terms and conditions, except as may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting enforcement of creditors' rights generally, and (ii)
laws relating to the availability of specific performance, injunctive relief
or other equitable remedies.
As used in this Agreement, "Transaction Documents" shall mean the
Xxxx of Sale, the Assumption Agreement, the Escrow Agreement, the Notes, the
Key Employee Employment Agreements (as defined in Section 11.4(d) hereof),
the Selling Member Employment Agreements (as defined in Section 11.4(d)
hereof), the Noncompetition Agreement, the Assignment of Lease (as defined in
Section 11.8 hereof), and the License Agreement (as defined in Section 11.9
hereof).
9.4. No Conflict. The execution, delivery and performance of
this Agreement and the Transaction Documents to which they are a party by
Seller, or Selling Members, as the case may be, and the consummation of the
transactions contemplated hereby and thereby will not (i) violate, conflict
with, result in any breach of, or constitute a default (or an event that,
with notice or lapse of time or both, would constitute a default) under
Seller's articles of organization or operating agreement (or equivalent
documents); (ii) violate, conflict with, result in any breach of, or
constitute a default (or an event that, with notice or lapse of time or both,
would constitute a default) under any Contract or Judgment (as defined below)
to which Seller or Selling Members, as the case may be, are a party or by
which they are bound, or which relates to the Purchased Assets or the Printer
Business; (iii) result in the creation of any Encumbrance (as defined below)
on any of the Purchased Assets; (iv) violate any statute, ordinance,
regulation, order, judgment or decree of any court or governmental agency or
board; or (v) violate or result in the suspension, revocation, modification,
invalidity or limitation of any Permits relating to the Purchased Assets or
the Printer Business; or (vi) give any party with rights under any Contract,
Judgment or other restriction to which Seller is a party or by which it is
bound or which relates to the Purchased Assets or the Printer Business, the
right to terminate, modify or accelerate any rights, obligations or
performance under such Contract, Judgment or restriction.
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As used in this Agreement, "Judgment" shall mean any judgment,
order, award, writ, injunction or decree of any governmental authority or
arbitrator.
As used in this Agreement, "Encumbrances" shall mean any security
interest, mortgage, lien, charge, option, easement, license, adverse claim or
restriction of any kind, including, without limitation, any restriction on
the use, transfer, voting, receipt of income or other exercise of any
attributes of ownership, but shall not include Encumbrances securing Assumed
Liabilities, Encumbrances securing the obligations of ATS and Buyer to Seller
and Selling Members, or statutory liens for taxes not yet due or securing
Seller's obligations under unemployment or workers' compensation laws.
9.5. No Consents. Except as set forth in the Schedule of
Required Consents attached hereto as Schedule 9.5, no consents, approvals or
authorizations of, or declaration, filing or registration with, any
governmental authority or any other person or entity are required for the
execution, delivery and performance by Seller or Selling Members, as the case
may be, of this Agreement and the Transaction Documents to which they are a
party, and the consummation of the transactions contemplated hereby and
thereby.
9.6. Leased Real Property. Seller owns no real property. The
Schedule of Leased Real Property attached hereto as Schedule 9.6 contains a
complete and accurate list of all real property leased by Seller and used in
the Printer Business, including, without limitation, the Premises (the
"Leased Real Property"), all of which are leased to Seller pursuant to
written leases, true and correct copies of which, including any amendments
thereto, have been provided to Buyer and are included in the Schedule of
Contracts. Seller is not in default under any lease or agreement relating to
the Premises nor, to the best of Seller's knowledge, is any other party
thereto in default thereunder. All options in favor of Seller to purchase
any of the Premises, if any, are in full force and effect. No material
capital expenditures for the maintenance and/or repair of the Premises are
required in order to operate the Printer Business in the ordinary course of
business consistent with past practice.
9.7. Title to Purchased Assets. Seller is the sole owner of all
the Purchased Assets and has good and marketable title to the Purchased
Assets. Upon consummation of the transactions contemplated by this
Agreement, Buyer will acquire good and marketable title to the Purchased
Assets, free and clear of any and all Encumbrances.
9.8. Sufficiency of Purchased Assets. The Purchased Assets are
adequate to conduct the Printer Business as it is presently conducted and as
it has been conducted during the periods reflected in the Financial
Statements (as defined in Section 9.12 hereof), and the Purchased Assets
conveyed to Buyer on the Closing Date will be adequate to enable Buyer to
continue to conduct the Business as it is presently conducted and as it has
been conducted during the periods reflected in the Financial Statements.
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9.9. Condition of Purchased Assets. Except as set forth on the
Schedule of Conditions attached hereto as Schedule 9.9, the machinery,
equipment, furniture and other physical assets included in the Purchased
Assets are in good operating condition and repair (ordinary wear and tear
excepted), and are adequate for the conduct of the Printer Business as it is
presently conducted.
9.10. Inventory. All Inventory consists of items of a quantity
and quality historically useable and/or saleable in the normal course of
business, except for items of obsolete and slow-moving material and materials
which are below standard quality, all of which have been written down to
estimated net realizable value in accordance with generally accepted
accounting principles. With the exception of items which are obsolete or of
below standard quality which have been written down to their estimated net
realized value, the Inventory is free from defects in materials and/or
workmanship. The Inventory is not excessive in kind or amount, or slow
moving, in light of the Printer Business done or expected to be done. Since
the Balance Sheet Date (as defined in Section 9.12 hereof) there has not been
a material change in the level of Inventory. All Inventory is located at the
Leased Real Property.
9.11. Books and Records. Seller's books, accounts and records
are, and have been, maintained in Seller's usual, regular and ordinary
manner, in accordance with generally accepted accounting practices and all
transactions to which Seller has been a party are properly reflected therein.
9.12. Financial Statements.
(a) Seller has delivered the following financial statements
of the Print Business, which comprise the Financial Statements attached
hereto as Schedule 9.12 (collectively, the "Financial Statements"): (i) an
unaudited balance sheet (the "Balance Sheet") dated as of October 31, 2007
(the "Balance Sheet Date"), (ii) audited balance sheets dated as of December
31 for each of the years ending December 31, 2005 and 2006, (iii) an
unaudited statement of income for the trailing twelve (12)-month period
ending on the Balance Sheet Date, and (iv) audited statements of income for
each of the years 2005 and 2006.
(b) The Financial Statements (i) were prepared from the
books and records kept by Seller for the Printer Business, (ii) are true and
correct in all material respects, (iii) have been prepared in accordance with
generally accepted accounting principles applied consistently throughout the
periods involved, and (iv) fully and fairly present the financial condition
of the Printer Business as of the dates thereof and the results of the
operations of the Printer Business for the periods indicated. The Balance
Sheet contained in the Financial Statements fairly reflects all assets and
liabilities of the Printer Business of the types normally reflected in
balance sheets as of the dates thereof, and except for current liabilities
incurred in the ordinary course of business consistent with past practices
(and not materially different in type or amount), the Printer Business does
not have any liabilities or obligation of any nature, whether accrued,
16
absolute, contingent or otherwise, whether due or to become due, whether
properly reflected as a liability or a charge or reserve against an asset or
equity account, and whether the amount thereof is readily ascertainable, that
are not reflected in the Financial Statements.
9.13. Accounts Receivable. All Accounts Receivable reflected in
the Balance Sheet or existing at the time of Closing represent amounts due
for services performed or sales actually made in the ordinary course of
business and properly reflect the amounts due. The bad debt reserves and
allowances reflected in the Balance Sheet are adequate. All Accounts
Receivable existing and remaining unpaid at the time of Closing will be
collectible by Buyer in the ordinary course of business consistent with past
practice, subject to bad debt reserves and allowances reflected in the
Balance Sheet.
9.14. Absence of Certain Changes. Since the Balance Sheet Date,
Seller has conducted the Printer Business in the ordinary course of business,
consistent with past practice, and:
(a) There have been no material adverse changes in the
financial condition, operations, assets or prospects of the Printer Business.
(b) Seller has not (i) entered into any transaction that is
materially adverse to the Printer Business or the Purchased Assets, (ii) made
(or committed to make) capital expenditures in an amount which exceeds
$10,000 for any item or $25,000 in the aggregate, (iii) made any change in
its accounting methods or principles (or the application of those methods or
principles), or (iv) incurred any indebtedness for borrowed money in excess
of $10,000.
(c) Seller has not sold or transferred any assets necessary
for the operation of the Printer Business (other than assets that have been
replaced with other assets of equal or greater value and the sale of
inventory in the ordinary course of business).
(d) Seller has not entered into any employment, bonus or
deferred compensation agreement with any employee of the Printer Business
that will affect the Printer Business or Seller's obligations under this
Agreement.
(e) Seller has not granted or agreed to grant any increase
in any rates of salaries, compensation or commissions to employees or
independent contractors of the Printer Business, or any specific bonus or
increase in salary or compensation to employees or independent contractors of
the Print Business, or provided any additional pension, retirement or other
employment benefits for employees or independent contractors of the Printer
Business.
(f) Seller has not, other than in the ordinary course of
business, consistent with past practice, acted to (i) delay the payment of
any accounts payable or accrued expenses of the Printer Business, or (ii)
defer any expenses of the Printer Business.
17
(g) Seller has maintained usual and customary levels of
inventory and supplies.
9.15. Compliance with Laws. Seller, in the conduct of the
Printer Business and in the ownership of the Purchased Assets, has not
violated and is not in violation of, nor has it made any improper payments or
incurred any liability in respect of, any material provision of federal,
state or local laws, codes, regulations or ordinances, including, without
limitation, relating to environmental protection, health, hazardous or toxic
substances, building use and occupancy, fire or safety hazards, occupational
safety, labor or employee benefit or employment discrimination laws, nor has
Seller or Selling Members, as the case may be, received any notices of
investigation or violation pertaining to any such matters.
9.16. Employee Benefit Plans.
(a) Except as set forth on the Schedule of Plans attached
hereto as Schedule 9.16 neither Seller nor any affiliate of Seller as
determined under the section 414(b), (c), (m) or (o) of the Code ("ERISA
Affiliate") maintains, administers or contributes to, or has maintained,
administered or contributed to, nor do the employees of Seller or any ERISA
Affiliate receive or expect to receive as a condition of employment, benefits
pursuant to any: (i) employee pension benefit plan (as defined in Section
3(2) of the Employment Retirement Income Security Act of 1974, as amended
("ERISA")) ("Plan"), including, without limitation, any multiemployer plan as
defined in Section 3(37) of ERISA ("Multiemployer Plan"); (ii) employee
welfare benefit plan (as defined in Section 3(1) of ERISA) ("Welfare Plan");
or (iii) bonus, deferred compensation, stock purchase, stock option,
severance plan, salary continuation, vacation, sick leave, fringe benefit,
incentive, insurance, welfare or similar arrangement ("Employee Benefit
Plan").
(b) All Plans, Welfare Plans and Employee Benefit Plans and
any related trust agreements or annuity contracts comply with and are and
have been operated in accordance with each applicable provision of ERISA, the
Code (including, without limitation, the requirements of section 401(a) of
the Code to the extent any Plan is intended to conform to that section),
other federal statutes, state law (including, without limitation, state
insurance law) and the regulations and rules promulgated pursuant thereto or
in connection therewith. Neither Seller nor any ERISA Affiliate has any
notice or knowledge of any violation of any of the foregoing by any Plan,
Welfare Plan, or Employee Benefit Plan. Each Welfare Plan which is a group
health plan (within the meaning of section 5000(b)(1) of the Code) complies
with and has been maintained and operated in accordance with each of the
requirements of section 162(k) of the Code as in effect for years beginning
prior to 1989, section 4980B of the Code for years beginning after December
31, 1988 and Part 6 of Subtitle B of Title I of ERISA. A favorable
determination as to the qualification under the Code of each of the Plans and
each amendment thereto has been made by the IRS, each trust funding Welfare
Plans or Plans is and has been tax-exempt and each Plan and related trust
agreement remain qualified under the Code. Future compliance with the
18
requirements of ERISA and the Code as in effect on the Closing Date and any
collective bargaining agreements to which Seller or any ERISA Affiliate is
subject or bound will not result in any increase in benefits under any Plan
or any Welfare Plan.
(c) Neither Seller nor any ERISA Affiliate has incurred any
liability to the Pension Benefit Guaranty Corporation ("PBGC") as a result of
the voluntary or involuntary termination of any Plan which is subject to
Title IV of ERISA. There is currently no active filing by Seller or any
ERISA Affiliate with the PBGC (and no proceeding has been commenced by the
PBGC) to terminate any Plan which is subject to Title IV of ERISA and which
has been maintained or funded, in whole or in part, by Seller or any ERISA
Affiliate.
(d) There are no pending or threatened claims against any of
the Plans, Welfare Plans, or Employee Benefit Plans by any employee or
beneficiary covered under any Plans, Welfare Plans or Employee Benefit Plans
or otherwise involving any Plan, Welfare Plan or Employee Benefit Plan (other
than routine claims for benefits).
(e) With respect to each Plan which is a Multiemployer Plan
covering employees of Seller or any ERISA Affiliate: (i) neither Seller nor
such ERISA Affiliate would incur any withdrawal liability (as defined in
Section 3(37) of ERISA) on a complete withdrawal from each such Plan as of
the Closing Date, under applicable laws and conditions of each such Plan and
the applicable provisions of law without regard to any limitation, reduction
or adjustment of liability under Title IV of ERISA or any plan provision
based on Title IV of ERISA; and (ii) neither Seller nor any ERISA Affiliate
has made or suffered a "complete withdrawal" or a "partial withdrawal", as
such terms are respectively defined in Sections 4203 and 4205 of ERISA.
9.17. Employment Matters. The Schedule of Employees attached
hereto as Schedule 9.17 contains a true and complete list of all employees
who are employed by Seller and provide services to the Printer Business as of
the date of this Agreement, and said list correctly reflects their salaries,
wages, other compensation (other than benefits under the Plans, Welfare Plans
and Employee Benefit Plans), dates of employment and positions.
(a) There is no pending or threatened unfair labor practice
charges or employee grievance charges
(b) There is no request for union representation, labor
strike, dispute, slowdown or stoppage actually pending or, to the best of
Seller's and Selling Members' knowledge, threatened against or directly
affecting Seller.
(c) No grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending and no claims therefor
exist.
19
(d) The employment of each of Seller's employees is
terminable at will without cost to Seller except for payments required under
the Plans, Welfare Plans and Employee Benefit Plans and payment of accrued
salaries or wages and vacation pay. Except as required by Section 4980B of
the Code, Seller has no liability to provide medical benefits to former
employees of Seller or their spouses or dependents.
(e) Seller has not taken any actions which were calculated
to dissuade any present employees, representatives or agents of Seller from
becoming associated with Buyer. To Seller's knowledge, no officer or other
key employee of Seller intends to terminate employment with Seller prior to
or following the Closing, other than as contemplated by Section 11.3 hereof.
9.18. Environmental Matters. Except as set forth on the Schedule
of Environmental Matters attached hereto as Schedule 9.18:
(a) Seller is (and at all times preceding the date hereof
has been) in compliance with all Environmental Laws (as defined below).
There has been no Release (as defined below) by Seller or, to the best of
Seller's or Selling Members' knowledge, any other person of any Hazardous
Material (as defined below) at, on, under, in, to or from any of the
facilities used in the Printer Business ("Facilities"). There is no Release
of any Hazardous Material at, on, under, in, or from any other property that
has migrated, or is migrating to, on, or under, or is otherwise threatening
any Facility. No person is currently alleging through a written Claim (as
defined below) or, to Seller's knowledge, through an unwritten Claim, that
Seller is actually or potentially responsible for the presence or Release of
any Hazardous Material at any location, whether at any Facility or otherwise.
Seller is not currently subject to any written Claim or, to Seller's
knowledge, any unwritten Claim, by any person alleging any actual or
threatened injury or damage to any person, property, natural resource or the
environment arising from or relating to the actual or alleged exposure to any
Hazardous Material or to the actual or alleged presence or Release of any
Hazardous Materials at, on, under, in, to or from any Facility in connection
with any operations or activities thereat. Neither the Facilities nor any
operations or activities at the Facilities, nor any other operations or
activities of Seller is subject to any Claim or any Encumbrance relating to
any Environmental Law or Environmental Claims (as defined below). There are
no underground storage tanks presently located at any Facility.
(b) There is no administrative order or notice, consent
order or agreement, litigation, summons, settlement or citation with respect
to Hazardous Materials or Releases thereof or any actual or alleged violation
of any Environmental Law in connection with the operation of the Facilities.
No state, local or foreign government, governmental agency or regulatory
authority is alleging that any condition exists at any Facility which is
violation of or would require remediation under any Environmental Law.
(c) Seller holds and is in compliance with all Environmental
Permits (as defined below). All such Environmental Permits are in full force
and effect. Seller has made timely applications or notifications for the
20
renewal of all Environmental Permits for which Environmental Laws require
that applications or notices must be filed by it on or before the date hereof
to maintain the Environmental Permits in full force and effect up to and
through the date hereof.
(d) Seller has timely filed all reports, obtained all
required approvals, generated and maintained in all material respects all
required data, documentation and records required by the Environmental Laws
or Environmental Permits, or any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated,
or approved thereunder, except where the failure to do so would not result,
individually or in the aggregate, in a Material Adverse Change (as defined in
Section 9.28 hereof).
(e) As used in this Agreement, the following terms shall
have the following meanings:
(1) "Claim" shall mean any private, judicial or
administrative claim, demand, cause of action, suit, litigation, proceeding,
arbitration, hearing, inquiry, investigation, action, order, consent,
agreement or similar action.
(2) "Environmental Claim" shall mean any written notice
of violation, written notice of potential or actual responsibility or
liability, claim, suit, action, demand, directive or order by any person for
any damage (including, but not limited to, personal injury, tangible or
intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, environmental removal,
response or remediation costs, nuisance, pollution, contamination or other
adverse effects on the environment or for fines, penalties or restrictions on
existing environmental permits or licenses) resulting from or relating to (i)
the presence of, the Release into the environment of, or exposure to, any
Hazardous Material, (ii) the generation, manufacture, processing,
distribution, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material, (iii) the violation of any Environmental Laws, or
(iv) the non-compliance with any Environmental Laws.
(3) "Environmental Laws" shall mean any federal, state,
regional, county, local, foreign, governmental statute, law, regulation,
ordinance or license pertaining to protection of the environment, health or
safety of persons, natural resources, conservation, wildlife, waste
management, any Hazardous Material activity, or pollution (including, without
limitation, regulation of Releases to air, land, water and groundwater), and
includes, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, Solid Waste Disposal Act, as amended by the Resource
Conversation and Recovery Act and Hazardous and Solid Waste Amendments,
Federal Water Pollution Control Act, as amended by the Clean Water Act, Clear
Air Act, as amended, Toxic Substances Control Act, Emergency Planning and
Community Right-to-Know Act, National Environmental Policy Act, Safe Drinking
Water Act, Occupational Safety and Health Act and all rules and regulations
promulgated under all such statutes, and any similar or implementing state
law, including all amendments, rules and regulations promulgated thereunder;
in each case as in effect on the date hereof.
21
(4) "Environmental Permits" shall mean all permits,
certificates, licenses, approvals, registrations and authorizations required
under Environmental Laws in connection with the operation of the its business
and the use and ownership of the Facilities.
(5) "Hazardous Material" shall mean any pollutants,
contaminants, pesticides, asbestos, polychlorinated biphenyls, petroleum
(including crude oil or any fraction thereof), lead-based paint, explosive or
radioactive substances, or hazardous, extremely hazardous, special, dangerous
or toxic wastes, substances, chemicals or materials the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, disposal, abatement, cleanup, removal, remediation or
handling of which, is prohibited, controlled or regulated by an Environmental
Law.
(6) "Release" shall mean any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Materials.
9.19. Taxes. All Tax obligations of Seller with respect to its
operation of the Printer Business have been timely paid or are being
contested in good faith, and, except as reflected in the balance sheets
included in the Financial Statements and in any balance sheet hereafter
delivered to Buyer, Seller has no liability for any Tax obligations with
respect to its operation of the Printer Business and no interest or penalties
have accrued or are accruing with respect thereto, whether state, county,
local or otherwise with respect to any periods prior to the Closing Date
except, in each case, any Tax obligations that, if not timely paid by Seller,
could not result in (i) an Encumbrance on any of the Purchased Assets or (b)
the commencement of any Claim against Buyer. Neither Seller nor any of
Selling Members is a "foreign person" (as that term is defined in Section
1445 of the Code).
9.20. Contracts. The Schedule of Contracts attached hereto as
Schedule 9.20 contains a complete and accurate list of all material
contracts, agreements, leases or other instruments or obligations, oral or
written, to which Seller or Selling Members, as the case may be, is a party
and which relate to the operation of the Printer Business; employment and
employment related agreements; independent contractor and independent
contractor-related agreements; covenants not to compete; loan agreements;
notes; indentures or mortgages; debentures; security agreements; pledge
agreements; sales representative, distribution, franchise, advertising and
similar agreements; leases and subleases of leased personal property or the
Premises; license agreements; purchase orders and purchase contracts; and
sales orders and sales contracts (each, a "Contract"). All such Contracts
are valid and in full force and effect and are enforceable in accordance with
their respective terms. No default by Seller has occurred thereunder and, to
the best of Seller's and Selling Members' knowledge, no default by the other
contracting parties has occurred thereunder. No event, occurrence or
condition exists which, with the lapse of time, the giving of notice, or
both, or the happening of any further event or condition, would become a
22
default by Seller thereunder. Seller has not received notice that any party
to any such Contract intends to cancel, terminate or refuse to renew such
Contract, and to the best of Seller's or Selling Members' knowledge, no party
to any such Contract intends to cancel, terminate or refuse to renew such
Contract. Other than as set forth in the Schedule of Required Consents, no
consent, approval or authorization of any third party is required for the
assignment of any such Contract to Buyer and all such Contracts will continue
to be binding on the other parties thereto following the Closing and their
assignment to Buyer.
9.21. Warranties. Except as may be set forth on the Schedule of
Warranties attached hereto as Schedule 9.21, Seller has not made any oral or
written warranties with respect to the quality or absence of defects of its
products which it has sold or performed which are in force as of the date
hereof. There are no claims pending or anticipated or threatened against
Seller with respect to the quality of or absence of defects in such products.
9.22. Affiliated Transactions. The Schedule of Affiliated
Transactions attached hereto as Schedule 9.22 sets forth every business
relationship (including employment relationships) between Seller, on the one
hand, and Selling Members and/or Selling Members' Affiliates (as defined
below), on the other hand. None of said parties (other than Seller),
directly or indirectly, own any assets which are used in the Printer
Business, or is engaged in any business which competes with the Printer
Business.
As used in this Agreement, "Affiliate" shall mean with respect to
any person means any other person who directly or indirectly controls, is
controlled by, or is under common control with such person including in the
case of any person who is an individual, his or her spouse or registered
domestic partner, any of his or her descendants (lineal or adopted) or
ancestors, and any of their spouses or registered domestic partner. For
purposes of the previous sentence, (i) "control" shall mean the power, direct
or indirect, to direct or cause the direction of the management and policies
of a person through voting securities, contract or otherwise; and (ii)
"person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, bank, trust company, trust or
other entity, whether or not legal entities, or any governmental entity,
agency or political subdivision.
9.23. Permits. The Schedule of Permits attached hereto as
Schedule 9.23 contains a complete and accurate list of every license, permit,
certificate, operating rights and franchises, registration and governmental
approval, agreement and consent applied for, pending by, issued or given to
Seller, and every agreement with governmental authorities (federal, state,
local or foreign) entered into by Seller, which is in effect or has been
applied for or is pending, exclusive of Environmental Permits (the
"Permits"), together with their expiration dates if any. Such Permits
constitute all licenses, permits, registrations, approvals and agreements and
consents (other than Environmental Permits) which are required in connection
with the ownership or operation of the Purchased Assets or the conduct of the
Printer Business as presently conducted. Seller is not in violation of any
23
Permits, and no written notice has been received by Seller or Selling Members
alleging any such violation, nor to the best of Seller's and Selling Members'
knowledge, is there any reasonable basis for future violations which might
have a material adverse effect on the Printer Business as presently conducted
or the Purchased Assets.
9.24. Insurance Policies. Seller has, with respect to the
Printer Business, maintained and now maintains (i) insurance on all its
assets and businesses of a type customarily insured, covering property damage
and loss of income by fire or other casualty, and (ii) adequate insurance
protection against all liabilities, claims and risks against which it is
customary for entities engaged in the same or similar business similarly
situated to insure. The Schedule of Insurance Policies attached hereto as
Schedule 9.24 contains a true and correct list and description (including
coverages, deductibles and expiration dates) of all current insurance
policies which are owned by Seller or which name Seller as an insured and
which pertain to the Purchased Assets, the Printer Business, or Seller's
employees. All insurance policies now maintained are in full force and
effect, and Seller has not received notice of termination or non-renewal of
any such insurance policies. The Schedule of Insurance Policies also
contains a true and complete loss run for Seller for the three (3) year
period preceding the date hereof.
9.25. Claims and Legal Proceedings. Except as set forth on the
Schedule of Claims and Legal Proceedings attached hereto as Schedule 9.25,
there are no Claims pending or, to the best of Seller's and Selling Members'
knowledge, threatened, or any order, injunction or decree outstanding,
against Seller. To the best knowledge of Seller and Selling Members, there
is no reasonable basis for future Claims against Seller which, if adversely
determined, might result in a Material Adverse Change (as defined in Section
9.28 hereof).
9.26. Intellectual Property.
(a) Seller or Selling Members are the sole and exclusive
owner of the entire right, title and interest in and to, and has the
exclusive right to use, free and clear of any additional payment obligation
or other Encumbrance, all Intellectual Property set forth in Part A of the
Schedule of Intellectual Property attached hereto as Schedule 2.5, including,
without limitation, the "TonerType" service xxxx, Reg. No. 2005840 (the
"Service Xxxx").
(b) Seller is licensed to use, free and clear of any
additional payment obligation or other Encumbrance, all Intellectual Property
set forth in Part B of the Schedule of Intellectual Property.
(c) The Schedule of Intellectual Property is an accurate and
complete list of all such Intellectual Property (i) used in the Printer
Business, (ii) used in the manufacture, use or sale of products by or for
Seller, (iii) the use or application of the products by customers in
accordance with promotions or recommendations of Seller, or that are owned by
Seller and relate to the products, (iv) or that is currently under
24
development or anticipated to be used in connection with any of the foregoing
subsections (i) through (iii). No Intellectual Property, other than that set
forth in the Schedule of Intellectual Property, are or has been used in or
are necessary in connection with the Printer Business or such manufacture,
use, sale or application of the products.
(d) All registrations listed in the Schedule of Intellectual
Property, including, without limitation, the registration for the Service
Xxxx, are in good standing, valid, subsisting and in full force and effect in
accordance with its terms and not subject to cancellation or modification
based on any condition existing on or before the Closing Date. All renewal
payments, maintenance payments or other fee associated with maintaining the
registration for the Service Xxxx and any other Intellectual Property in good
standing are due or payable more than sixty (60) days after the Closing Date.
(e) The Intellectual Property includes all of Seller's
technical information and data relating to the Printer Business, the
manufacture, use or sale of the products by or for Seller, the use or
application of the products by customers in accordance with the promotions or
recommendations of Seller, or otherwise relating to the products.
(f) To the best knowledge of Seller and Selling Members,
none of the Intellectual Property, or Seller's rights thereto, are being
infringed or otherwise violated by any person or entity.
(g) Subject to the terms and provisions of applicable
licenses, Seller has the right to make, use, offer to sell, sell, copy,
publicly display, publicly perform, make derivative works of, or in any other
manner exploit the Intellectual Property in the Printer Business, in the
manufacture, use or sale of products by or for Seller, and in the use or
application of the products by customers in accordance with promotions or
recommendations of Seller, or that are owned by Seller and relate to the
products, without infringing or otherwise violating any rights of any person
or entity.
(h) There is no pending or, to the best knowledge of Seller
and Selling Members, threatened Claim alleging any infringement or violation
by Seller. In addition, there is no pending or, to the best knowledge of
Seller, threatened Claim alleging any defect in or invalidity, misuse or
unenforceability of, or challenging the ownership or use of or Seller's
rights with respect to, any of the Intellectual Property, and to the
knowledge of Seller and Selling Members, there is no basis for any such
Claim. Furthermore, to the best knowledge of Seller and Selling Members,
there is no other Claim made by any person or entity pertaining to the
Intellectual Property. To the best knowledge of Seller and Selling Members,
none of the Intellectual Property is subject to any Judgment.
(i) To the best knowledge of Seller and Selling Members, the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents will not alter or impair any of the Intellectual
Property, and the Intellectual Property may be transferred to Buyer hereunder
without the consent or approval of any other party or governmental authority.
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(j) To the best knowledge of Seller and Selling Members, the
Printer Business does not involve the employment of any person in a manner
that violates any noncompetition or nondisclosure agreement that such person
entered into in connection with his or her employment or activities at any
time prior to employment by Seller.
9.27. Significant Customers and Suppliers. The Schedule of
Significant Customers and Significant Suppliers attached hereto as Schedule
9.27 lists each Significant Customer (as defined below) and each Significant
Supplier (as defined below). Except as set forth on the Schedule of
Significant Customers and Significant Suppliers, to the knowledge of Seller
and Selling Members, (i) no Significant Customer or Significant Supplier (as
defined below) is involved in, threatened with or affected by, any Claim,
Judgment or circumstances that may materially and adversely affect the
Purchased Assets or the conduct, business, operations, properties, condition
(financial or otherwise) or prospects of the Printer Business; (ii) there is
no indication that any Significant Customer or Significant Supplier intends
to terminate or modify its relationship with Seller; and (iii) the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents will not adversely affect the post-Closing relationship
of Buyer with any Significant Customer or Significant Supplier. Except as
set forth on the Schedule of Significant Customers and Significant Suppliers,
no Significant Customer or Significant Supplier has during the last 12 months
decreased or limited materially, or threatened to decrease or limit
materially, its purchase of Seller's products, or its supply of materials or
services to Seller, as the case may be.
As used in this Agreement, "Significant Customers" shall mean the
fifteen (15) largest customers of Seller relating to the Printer Business,
measured in terms of sales volume in dollars for the year ended December 31,
2006; and "Significant Suppliers" shall mean the top fifteen (15) largest
suppliers of Seller relating to the Printer Business measured in terms of
goods purchased for the year ended December 31, 2006, for use in Seller's
Printer Business.
9.28. Material Adverse Change. Without limiting any other
representation or warranty contained herein, since the Balance Sheet Date,
Seller has not suffered or, to the best of Seller's and Selling Members'
knowledge, been threatened with any material adverse change in the business,
operations, assets, liabilities, financial condition or prospects, including
the existence or threat of any labor dispute, or any material adverse change
in, or loss of, any relationship between Seller and any of its customers,
suppliers or key employees, or that might have a material adverse effect on
the rights, duties or obligations of the parties set forth in this Agreement
(a "Material Adverse Change"). In furtherance of the foregoing, except as
set forth on the Schedule of Significant Customers and Significant Suppliers,
Seller has no knowledge of any intention or indication by a Significant
Customer or Significant Supplier that such Significant Customer or
Significant Supplier intends to terminate its business relationship with
Seller or to limit or alter its business relationship with Seller in any
material respect.
26
9.29. Brokers. Except for Xxx Xxxxxx of the Xxxxxx Group, whose
commission shall be paid by Seller, neither Seller nor any of its Affiliates
has engaged any person to act or render services as a broker, finder or
similar capacity in connection with the transactions contemplated by this
Agreement, and no person has, as a result of any agreement or action by
Seller or any of its Affiliates, any right or valid claim against Seller for
any commission, fee or other compensation as a broker, finder or any similar
capacity in connection with the transactions contemplated by this Agreement.
Any brokerage or finder's fee due to any broker or finder in violation of the
foregoing representation shall be paid by Seller.
9.30. Securities Representation. In connection with the issuance
and acquisition of the Additional Consideration Stock contemplated by Section
7.6 hereof, each Selling Member hereby further represents and warrants to ATS
as follows:
(a) Each Selling Member is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act"). Each Selling Member has not been
organized solely for the purpose of acquiring the Additional Consideration
Stock.
(b) Each Selling Member is acquiring and will hold the
Additional Consideration Stock for investment for each Selling Member's
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act.
(c) Each Selling Member understands that the Additional
Consideration Stock has not been registered under the Securities Act by
reason of a specific exemption therefrom and that the Additional
Consideration Stock must be held indefinitely, unless they are subsequently
registered under the Securities Act or each Selling Member obtains an opinion
of counsel, in form and substance satisfactory to ATS and its counsel, that
such registration is not required. Each Selling Member further acknowledges
and understands that ATS is under no obligation to register the Additional
Consideration Stock.
(d) Each Selling Member is aware of the adoption of Rule 144
by the Securities and Exchange Commission under the Securities Act, which
permits limited public resales of securities acquired in a non-public
offering, subject only to the satisfaction of certain conditions. Each
Selling Member acknowledges and understands that the conditions for resale
set forth in Rule 144 have not been satisfied and that ATS has no plans to
satisfy these conditions in the foreseeable future.
(e) Each Selling Member will not sell, transfer or otherwise
dispose of the Additional Consideration Stock in violation of the Securities
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
the rules promulgated thereunder, including Rule 144 under the Securities
Act. Each Selling Member agrees that each Selling Member will not dispose of
the Additional Consideration Stock unless and until each Selling Member has
provided ATS with written assurances, in substance and form satisfactory to
27
ATS, that (i) the proposed disposition does not require registration of the
Additional Consideration Stock under the Securities Act or all appropriate
action necessary for compliance with the registration requirements of the
Securities Act or with any exemption from registration available under the
Securities Act (including Rule 144) has been taken and (ii) the proposed
disposition will not result in the contravention of any transfer restrictions
applicable to the Additional Consideration Stock under any state blue sky
laws or regulations.
(f) Each Selling Member has been furnished with, and has had
access to, such information as each Selling Member considers necessary or
appropriate for deciding whether to invest in the Additional Consideration
Stock, and each Selling Member has had an opportunity to ask questions and
receive answers from ATS regarding the terms and conditions of the issuance
of the Additional Consideration Stock.
(g) Each Selling Member is aware that each Selling Member's
investment in ATS is a speculative investment that has limited liquidity and
is subject to the risk of complete loss. Each Selling Member is able,
without impairing each Selling Member's financial condition, to hold the
Additional Consideration Stock for an indefinite period and to suffer a
complete loss of each Selling Member's investment in the Additional
Consideration Stock.
9.31. Full Disclosure. Seller has disclosed to Buyer in writing
all material facts and information relating to the Purchased Assets and the
conduct, business, operations, properties, condition (financial or otherwise)
and prospects of the Printer Business. No information furnished by Seller or
its Affiliates to Buyer in connection with this Agreement (including, but not
limited to, the Financial Statements and all information in the Schedules
attached hereto) is false or misleading in any material respect. In
connection with such information and with this Agreement and the transactions
contemplated hereby, Seller has not made any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements made or information delivered, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties contained in this Section 9 do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements and information contained in this Section 9 when considered
together with the accompanying Schedules, not misleading.
10. Representations and Warranties of Buyer and ATS. Buyer and ATS,
jointly and severally, hereby represent and warrant to Seller and Selling
Members that:
10.1. Organization. Buyer is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has all requisite power and authority to carry on its
business as presently conducted. ATS is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and
has all requisite power and authority to carry on its business as presently
conducted. Buyer and ATS are each is duly qualified or licensed to do
28
business and are in good standing in each jurisdiction in which the nature of
their respective businesses or their properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed would not have a material adverse effect on Buyer or
ATS.
10.2. Authority; Enforceability. Buyer and ATS have full power
and authority to execute and deliver this Agreement and the Transaction
Documents to which they are a party, and to perform their respective
obligations hereunder and thereunder. This Agreement and the Transaction
Documents to which each of Buyer and ATS are parties constitute the valid and
legally binding obligations of Buyer and ATS, enforceable in accordance with
their respective terms and conditions, except as may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting enforcement of creditors' rights generally, and (ii) laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
10.3. No Conflict. The execution, delivery and performance of
this Agreement and the Transaction Documents to which it is a party by Buyer
and ATS, and the consummation of the transactions contemplated hereby and
thereby will not (i) violate, conflict with, result in any breach of, or
constitute a default (or an event that, with notice or lapse of time or both,
would constitute a default) under ATS's certificate of incorporation or
bylaws (or equivalent documents) or Buyer's articles of organization or
operating agreement (or equivalent documents); (ii) violate, conflict with,
result in any breach of, or constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default) under any
Contract or Judgment (as defined below) to which Buyer or ATS is a party or
by which Buyer or ATS is bound; or (iii) violate any statute, ordinance,
regulation, order, judgment or decree of any court or governmental agency or
board.
10.4. No Consents. No consents, approvals or authorizations of,
or declaration, filing or registration with, any governmental authority or
any other person or entity are required for the execution, delivery and
performance by Buyer or ATS of this Agreement and the Transaction Documents
to which Buyer or ATS is a party, and the consummation of the transactions
contemplated hereby and thereby.
10.5. Brokers. Neither Buyer nor any of its Affiliates has
engaged any person to act or render services as a broker, finder or similar
capacity in connection with the transactions contemplated by this Agreement,
and no person has, as a result of any agreement or action by Buyer or any of
its Affiliates, any right or valid claim against Buyer for any commission,
fee or other compensation as a broker, finder or any similar capacity in
connection with the transactions contemplated by this Agreement. Any
brokerage or finder's fee due to any broker or finder in violation of the
foregoing representation shall be paid by Buyer.
10.6. Capitalization. Buyer is a wholly-owned subsidiary of ATS.
Schedule 10.6 sets forth for each class of common and preferred stock of ATS
the number of shares authorized and the number of shares issued and
29
outstanding, as well as each security which is convertible into common or
preferred stock of ATS. All of the issued and outstanding shares of ATS have
been duly authorized, are validly issued, fully paid, and nonassessable.
Except as set forth in Schedule 10.6, (i) there are no outstanding or
authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that
could require ATS to issue, sell, or otherwise cause to become outstanding
any of its capital stock, (ii) here are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to ATS, and (iii) there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock
of ATS.
10.7. Financial Statements. Attached hereto as Schedule 10.7 are
the following financial statements of ATS (collectively the "ATS Financial
Statements"): (i) audited consolidated and unaudited consolidating balance
sheets and statements of income, changes in stockholders' equity, and cash
flow as of and for the fiscal years ended December 31, 2006 (the "Most Recent
Fiscal Year End") for ATS and its subsidiaries; and (ii) unaudited
consolidated and consolidating balance sheets and statements of income,
changes in stockholders' equity, and cash flow (the "Most Recent ATS
Financial Statements") as of and for the nine (9) months ended September 30,
2007 for ATS and its subsidiaries. The ATS Financial Statements (including
the notes thereto) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of ATS and its
subsidiaries as of such dates and the results of operations of ATS and its
subsidiaries for such periods, are correct and complete, and are consistent
with the books and records of ATS and its subsidiaries (which books and
records are correct and complete); provided, however, that the Most Recent
ATS Financial Statements are subject to normal year end adjustments (which
will not be material individually or in the aggregate) and lack footnotes and
other presentation items.
10.8. Legal Compliance. Each of ATS and its subsidiaries, and
Buyer, and their respective predecessors and Affiliates has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging
any failure so to comply.
10.9. Litigation. Schedule 10.9 sets forth each instance in which
any of Buyer, ATS or any of its subsidiaries (i) is subject to any
outstanding Judgment or (ii) is a party or, to the knowledge of ATS's
directors and officers (and employees with responsibility for litigation
matters) of ATS and its subsidiaries, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator. None of the
actions, suits, proceedings, hearings, and investigations set forth in
Schedule 10.9 could result in any material adverse change in the business,
30
financial condition, operations, results of operations, or future prospects
of any of ATS and its subsidiaries. Except as may be set forth on Schedule
10.9, none of ATS and the directors and officers (and employees with
responsibility for litigation matters) of ATS and its subsidiaries has any
reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against any of ATS and its
subsidiaries.
10.10. Events Subsequent to Most Recent Fiscal Year End. Since
the Most Recent Fiscal Year End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of any of ATS and its Affiliates which has
not been reflected in the ATS Financial Statements.
10.11. Securities Regulation; Completeness of Disclosures. ATS
has made all filings required under the Securities Act and the Exchange Act,
and all such filings have been correct and complete in all material respects
and do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements and information
contained therein not misleading. The representations and warranties
contained in this Section 10 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements and information contained in this Section 10 not misleading.
No investigation, or receipt of information provided by or on behalf of Buyer
or ATS or review thereof by Seller or Selling Members or their
representatives or advisors shall diminish or obviate, or relieve Buyer or
ATS from, or affect Seller's or Selling Member's ability or right to rely on,
any of the representations, warranties, covenants and agreements of Buyer and
ATS contained in this Agreement and the Transaction Documents.
11. Certain Covenants.
11.1. Access; Confidentiality.
(a) Access. Prior to the Closing Date, Seller shall (i)
give Buyer and its accounting, legal, business, environmental, engineering,
intellectual property and other authorized representatives and advisors full
access, during normal business hours, to all plants, offices, warehouses and
other Facilities; (ii) furnish Buyer and its authorized representatives and
advisors with all documents and information relating to the Purchased Assets
and the Printer Business as may be reasonably requested by Buyer and its
authorized representatives and advisors; (iii) permit Buyer and its
authorized representatives and advisors to review all books, records and
Contracts relating to the Purchased Assets and the Printer Business as may be
reasonably requested by Buyer and its authorized representatives and
advisors, and make copies thereof; (iv) make available Seller's employees and
advisors, including those responsible for the management of the Printer
Business, and cause Seller's employees and advisors to furnish Buyer and its
authorized representatives and advisors with data and other information with
respect to the Purchased Assets and the Printer Business as may be reasonably
requested by Buyer and its authorized representatives and advisors, and
discuss with Buyer and its authorized representatives and advisors the
affairs of the Printer Business; and (v) fully cooperate with Buyer and its
31
authorized representatives and advisors in their investigation and
examination of the Purchased Assets and the affairs of the Printer Business.
No investigation, or receipt of information provided by or on behalf of
Seller or Selling Members or review thereof by Buyer or ATS or their
representatives or advisors shall diminish or obviate, or relieve Seller or
Selling Members from, or affect Buyer's or ATS' ability or right to rely on,
any of the representations, warranties, covenants and agreements of Seller
and Selling Members contained in this Agreement and the Transaction
Documents.
(b) Confidentiality. In the event that the Closing under
this Agreement shall not occur, Buyer shall keep confidential and not use or
disclose to any party any confidential information acquired by Buyer from
Seller pursuant to this Section 11.1 or otherwise disclosed in connection
with the negotiation of this Agreement, unless Seller shall give its written
consent to the contrary; provided, however, that the foregoing obligations of
confidentiality and non-use shall not apply to any information which (i) at
the time of disclosure is, or thereafter becomes, available to the public
through no breach of this Agreement by Buyer; or (ii) was known to, or
otherwise in the possession of, Buyer or its Affiliates prior to the receipt
of such information from Seller; or (iii) is obtained by Buyer from a source
other than Seller and other than one who would be breaching a commitment of
confidentiality to Seller by disclosing the information to Buyer; or (iv) is
developed by Buyer or its Affiliates independently of Seller's confidential
information; or (v) is required to be disclosed by Buyer in connection with a
pending Claim; and provided further that in the event Buyer becomes required
in connection with a pending Claim to disclose any of the information
acquired from Seller in connection with this Agreement, then Buyer shall
provide Seller with reasonable notice so that Seller may seek a court order
protecting against or limiting such disclosure or any other appropriate
remedy; and in the event such protective order or other remedy is not sought,
or is sought but not obtained, Buyer shall furnish only that portion of the
information which is required and shall endeavor, at Seller's expense, to
obtain a protective order or other assurance that the portion of the
information furnished by Buyer will be accorded confidential treatment. The
obligations of Buyer set forth in this Section 11.1(b) shall be in effect for
a period of two (2) years from the date of this Agreement.
11.2. Public Announcements. Before the Closing, each party
agrees not to make any public announcement in regard to this Agreement and
the Transaction Documents and the transactions contemplated hereby and
thereby without the other party's prior consent, except as may be required by
law, in which case the parties shall use reasonable efforts to coordinate
with each other with respect to the timing, form and content of such required
disclosures. Notwithstanding the foregoing, Seller and Selling Members
acknowledge that ATS has issued a press release, substantially in the form
attached to the Letter of Intent (as defined below), and that it will issue a
press release upon consummation of the transactions contemplated hereby.
As used in this Agreement, "Letter of Intent" shall mean that
certain Letter of Intent, dated May 14, 2007, by and between Seller and ATS.
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11.3. Conduct of Business. Prior to the Closing Date, Seller
shall conduct the Printer Business in the ordinary course consistent with
past practice. Without limiting the foregoing, Seller shall:
(a) not take or permit to exist any action or condition
specified in Section 9.13 hereof;
(b) maintain the Printer Business intact, market, promote,
sell and distribute the Products consistently with Seller's past practice,
and preserve the goodwill of the Printer Business and present relationships
with the customers and suppliers of the Printer Business and others with whom
the Printer Business has business relations;
(c) maintain the Purchased Assets in good operating
condition and repair;
(d) meet the contractual obligations of the Printer Business
and perform and pay its obligations as they mature in the ordinary course of
business;
(e) make payments and filings required to continue the
Intellectual Property and continue to prosecute and maintain all pending
applications therefor in all jurisdictions in which such applications are
pending;
(f) comply with all Judgments, all laws, statutes, rules,
ordinances and regulations promulgated by any governmental authority and all
Permits applicable to the conduct of the Printer Business or the ownership or
operation of the Purchased Assets or the Facilities, and maintain, and
prosecute applications for, such Permits and pay all Taxes, assessments and
other charges applicable thereto;
(g) promptly advise Buyer in writing of any material adverse
change in the Purchased Assets or the conduct, business, operations,
properties, condition (financial or otherwise) or prospects of the Printer
Business;
(h) not take any action, or omit to take any action, that
would result in any of Seller's representations and warranties made herein
being inaccurate at the time of such action or omission as if made at and as
of such time;
(i) give notice to Buyer promptly upon becoming aware of any
inaccuracy of any of Seller's representations or warranties made herein or in
any Schedules attached hereto or of any event or state of facts that would
result in any such representation or warranty being inaccurate at the time of
such event or state of facts as if made at and as of such time (any such
notice to describe such inaccuracy, event or state of facts in reasonable
detail); and
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(j) not solicit, approach or furnish information to any
prospective buyer, or negotiate with any third party concerning the sale or
transfer of the Purchased Assets, the Printer Business or any part thereof,
whether any of such actions are taken directly or indirectly, through a
representative or otherwise.
11.4. Employee Matters.
(a) No Assumption of Employee Benefits. Except as expressly
provided in Section 11.4(d) hereof, Buyer is not obligated to employ or
retain any employees of Seller. In no event shall Buyer assume or be bound
by any employment agreement, collective bargaining agreement or any bonus,
profit sharing, stock option, service award, benefit plan, deferred or other
additional compensation, pension or retirement arrangement or agreement of
Seller (whether or not included within any Plans, Welfare Plans and Employee
Benefit Plans). Seller shall remain fully responsible through the Closing
Date and thereafter for any and all such arrangements, agreements or plans,
which responsibility shall include, but not be limited to, any claims of
employees of Seller for unpaid compensation or remuneration of any nature,
including, without limitation, contingent salaries, incentive payments,
pension benefits (whether or not vested), medical expense reimbursement,
vacation pay, severance pay, other awards, interest or payments, or any
liability owed under any Plans, Welfare Plans and Employee Benefit Plans.
Such responsibilities of Seller with respect to Seller's employees shall be
fully performed as of the Closing Date.
(b) Termination. On the Closing Date, Seller shall notify
all persons employed by Seller in connection with the Printer Business of the
sale of the Purchased Assets pursuant to the terms and conditions of this
Agreement, shall terminate such employees, and shall pay all wages owing to
such employees (and vacation pay, severance pay, and fringe benefits to which
such employees are entitled) to the end that any employee of Seller whom
Buyer may employ as provided below shall have no claim with respect to the
foregoing against Buyer by reason of any prior employment by Seller.
(c) Offers of Employment. Buyer may, in its sole
discretion, on or before the Closing Date, elect to retain and employ any
employees of Seller, by giving oral or written notice of such election (which
notice shall include, without limitation, a list of all such employees
retained). In the event Buyer elects to retain and employ any such employees
of Seller, Seller shall remain fully liable for the claims of employees which
accrued prior to the Closing Date and Buyer shall be responsible for such
claims of employees which accrue from and after the Closing Date. Such
responsibilities of Seller with respect to Seller's employees shall be fully
performed as of the Closing Date. Buyer and Seller shall indemnify, defend
and hold the other harmless with respect to any such liability in accordance
with the provisions of Section 13 hereof.
(d) Key Employee Employment Agreements. Notwithstanding the
first sentence of Section 11.4(a) hereof to the contrary, (i) each of Xxx
Xxxxxxxx, Xx., Xxxxxx Xxxx, and Xxxxx Xxxxxxx (the "Key Employees") shall
enter into an employment agreement with Buyer, substantially in the form
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attached hereto as Exhibit E-1 (the "Key Employee Employment Agreements");
and (ii) each Selling Member shall enter into an employment agreement with
Buyer, substantially in the form attached hereto as Exhibit E-2 (the "Selling
Member Employment Agreements"). The Key Employee Employment Agreements and
the Selling Member Employment Agreements, respectively, shall provide that a
Buyer Default shall constitute good reason for the Key Employees and Selling
Members, respectively, to terminate their employment and be relieved of any
otherwise applicable non-competitive restrictions.
(e) Buyer Employee Benefits. Buyer maintains certain
employee benefit plans ("Buyer Plans") as more fully described in Buyer's
employee handbook, as the same may be modified from time to time. After the
Closing, Buyer shall offer all Key Employees participation in all Buyer Plans
for which they are eligible. Eligibility and vesting shall be determined on
substantially the same criteria as apply to similarly situated employees of
Buyer, except as otherwise restricted or limited by law or the terms of Buyer
Plans, and credit shall be given for the time period of service with Seller
prior to the Closing when determining eligibility and vesting under Buyer
Plans; provided that any benefits will begin to accrue only after the
Closing.
11.5. Observer Rights. For so long as any of the Notes are
outstanding, Selling Members shall each have the right to attend all meetings
of the Board of Directors of ATS in a nonvoting observer capacity and, in
this respect, ATS shall give Selling Members copies of all notices, minutes,
consents, and other materials that it provides to its directors; provided,
however, that Selling Members hereby agree to hold in confidence and trust
and to act in a fiduciary manner with respect to all information so provided;
and, provided further, that ATS reserves the right to withhold any
information and to exclude Selling Members the portion of any meeting (i) in
which their presence would adversely affect the attorney-client privilege
between ATS and its counsel, (ii) which concerns the employment of Selling
Members or the Key Employees or any controversy between ATS and/or the Buyer
and Selling Members, or (iii) in the event that Selling Members are not
employed by the Buyer or ATS at the time of such meeting, would result in
disclosure of trade secrets to Selling Members.
11.6. Noncompetition Agreement. Buyer, Seller, and Selling
Members shall execute and deliver the Noncompetition, Nonsolicitation and
Nondisclosure Agreement, in substantially the form attached hereto as Exhibit
F (the "Noncompetition Agreement"). The Noncompetition Agreement shall
provide for customary terms and conditions, including, without limitation, a
five (5) year term. The Noncompetition Agreement shall provide that in the
event of a Buyer Default which is not timely cured, Selling Members shall
cease to be obligated thereunder.
11.7. Key Employee Options. After the Closing, each of the Key
Employees and Selling Members shall be entitled to participate in ATS's Stock
Incentive Plan (as defined below), subject to applicable terms, conditions
and qualifications established by or at the direction of the ATS Board (or a
compensation committee thereof) from time to time. As a condition to
35
receiving such option grants, each of the individuals identified therein
shall have entered into customary agreements with ATS providing for such
option grants, and containing customary terms and conditions and vesting
schedules related thereto.
As used in this Agreement, "Stock Incentive Plan" shall mean the
Amended and Restated 2005 Stock Incentive Plan of ATS, a copy of which is
attached hereto as Exhibit G.
11.8. Assignment of Lease. On or before the Closing, Buyer and
Seller shall execute and deliver the Assignment and Assumption of Lease,
substantially in the form attached hereto as Exhibit H (the "Assignment of
Lease"), pursuant to which (i) Seller assigns all of its right, title and
interest under any and all leases relating to each Leased Real Property, and
(ii) Buyer accepts assignment and assumes all obligations under such leases.
In addition, at its sole cost and expense, Seller shall obtain and deliver to
Buyer at the Closing the written consent to the Assignment of Lease from each
lessor under each such lease (the "Lessor Consents").
11.9. Service Xxxx License Agreement. On or before the Closing,
Selling Members shall execute and deliver the Service Xxxx License Agreement,
substantially in the form attached hereto as Exhibit I (the "License
Agreement"), pursuant to which Selling Members shall grant to Buyer a
perpetual, royalty-free license to use the Service Xxxx.
11.10. Satisfaction of Indebtedness and Release of Encumbrances.
On or before the Closing, Selling Members shall cause Seller (i) to not have
any outstanding indebtedness with respect to any of the Purchased Assets
(other than the Assumed Liabilities), and (ii) to take such action as is
necessary to cause all Encumbrances on or against any of the Purchased Assets
or rights securing indebtedness (other than the Assumed Liabilities), to be
released, and to provide Buyer with documentation reasonably satisfactory to
it evidencing such release.
11.11. Consents. Seller shall use its best efforts and make
every good faith attempt (and Buyer shall cooperate with Seller) to obtain
all consents necessary for the assignment of, or alternate arrangements
satisfactory to Buyer with respect to, any Contract, insurance policy,
purchase order, sales order, or other instrument, Permit or Environmental
Permit (including the Lessor Consents), which is to be assigned to Buyer
hereunder and which may be required for such assignment to be effective.
11.12. Change of Name. Seller and each of its Affiliates shall,
within fifteen (15) days following the Closing, (i) deliver to Buyer evidence
of filing with the Secretary of State of the state of its organization or
incorporation, as the case may be, of an amendment to its articles of
organization or articles of incorporation, respectively, to change its name
to one that is not similar to "Tonertype" or any derivation thereof; and (ii)
take such actions and file such documents as shall be necessary to reflect
such name change in all jurisdictions in which Seller or any of its
Affiliates is qualified to do business as a foreign limited liability company
or corporation, as the case may be. Seller shall, within fifteen (15) days
following the Closing, deliver to Buyer copies of such documents evidencing
such name change filings.
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11.13. Exclusive Dealing. From the date of this Agreement until
November 30, 2007, Seller and Selling Members have not and shall not, and
have not and shall not permit any of their respective Affiliates, or other
representative of any of the foregoing (including advisors, agents,
attorneys, employees or consultants) to take any action to, directly or
indirectly, encourage, initiate, solicit or engage in discussions or
negotiations with, or provide any information to any person, other than Buyer
and ATS (and their respective Affiliates and representatives), concerning any
purchase of assets, securities of Seller, or any merger, contribution,
recapitalization, investment or similar transaction involving Seller or the
Printer Business. From the date of this Agreement until November 30, 2007,
Seller and Selling Members shall promptly (and in any event within two (2)
days thereof) (i) disclose to Buyer the existence or occurrence of any
proposal or contract that any of them or any of their representatives
described above may receive or become aware in respect of any such
transaction and the identity of the person from whom such a proposal or
contract is received, and (ii) provide to Buyer a copy of any such proposal
or contract.
11.14. Notice of Developments. Seller will give prompt written
notice to Buyer of any development occurring after the date of this Agreement
and prior to the Closing Date, or any item about which Seller did not have
actual knowledge on the date of this Agreement, that causes or reasonably
could be expected to cause the failure of any of the representations and
warranties in Section 9 hereof to be true and correct. No disclosure by
Seller pursuant to this Section shall be deemed to amend or supplement the
Schedules attached hereto or to prevent or cure any misrepresentation or
breach of any warranty or covenant.
11.15. Updated Schedules. The parties acknowledge that Seller
and Selling Members have delivered all schedules attached hereto (each, a
"Schedule"). Prior to the Closing Date, Seller and Selling Members may, at
their option, deliver to Buyer an updated final version of any Schedule
attached hereto (each, an "Updated Schedule"). The Updated Schedule, if any,
must be delivered to Buyer within three (3) business days of the anticipated
Closing Date, and shall amend and restate the Schedule in the form attached
to this Agreement to which it relates. Following receipt of any Updated
Schedule, Buyer may, in its sole discretion, elect to either (i) extend the
Closing Date by a period of not more than ten (10) days, or (ii) terminate
this Agreement pursuant to (and subject to the requirements of) Section
14.1(b) hereof. If Buyer does not elect to terminate this Agreement, then
the Updated Schedule shall be deemed accepted by Buyer.
11.16. Covenants to Satisfy Conditions. Each party shall proceed
with all reasonable diligence and use its best efforts to satisfy or cause to
be satisfied all of the conditions precedent to the other party's obligation
to purchase or sell the Purchased Assets that are set forth in Section 12
hereof, insofar as such matters are within the control of such party;
provided, however, that this provision shall not impose upon any party any
obligation to incur unreasonable expenses under the circumstances in order to
fulfill any condition contained in such Section.
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11.17. Further Assurances. The parties shall execute such
further documents, and perform such further acts, as may be necessary to
transfer and convey the Purchased Assets to Buyer, on the terms herein
contained, and to otherwise comply with the terms of this Agreement and
consummate the transaction contemplated hereby.
11.18. Post-Closing Cooperation. After the Closing Date, each
party shall provide the other party with such reasonable assistance (without
charge) as may be requested by the other party in connection with any Claim
or audit of any kind or nature whatsoever or the preparation of any response,
demand, inquiry, filing, disclosure or the like (including, but not limited
to, any tax return or form) relating to the Purchased Assets or the Printer
Business. Such assistance shall include, but not be limited to, permitting
the party requesting assistance to have reasonable access to the employees,
books and records of the other party.
12. Conditions to Closing.
12.1. Conditions Precedent to Obligations of Buyer. The
obligation of Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions, any one or more of which may be waived by
Buyer:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Seller and Selling Members made in this
Agreement, the Transaction Documents, and any Schedules or certificates
furnished pursuant hereto or thereto shall be true, complete and correct on
and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date.
(b) Consents and Approvals. All consents and approvals
required for the consummation of the transactions contemplated by this
Agreement and the Transaction Documents for which Seller or Selling Members
are responsible to obtain (including the Lessor Consents) shall have been
obtained by Seller and Selling Members and delivered to Buyer on or before
the Closing Date.
(c) No Material Adverse Change. From the date of this
Agreement to the Closing Date, there shall not have been any Material Adverse
Change.
(d) No Injunction or Litigation. As of the Closing Date,
there shall not be any Claim or Judgment of any nature or type threatened,
pending or made by or before any governmental authority that questions or
challenges the lawfulness of the transactions contemplated by this Agreement
or the Transaction Documents under any law or regulation or seeks to delay,
restrain or prevent such transactions.
(e) Compliance Certificate. Seller and Selling Members
shall have delivered to Buyer at the Closing a certificate stating that the
conditions specified in Sections 12.1(a) through 12.1(d) hereof have been
fulfilled.
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(f) Managing Member's Certificate. Seller shall have
delivered to Buyer at the Closing a Managing Member's certificate and
incumbency certificate, together with a copy of the following documents,
certifying that such documents are a true and correct copy thereof as of the
Closing Date: (i) Seller's Articles of Organization, as then in effect; (ii)
Seller's Operating Agreement, as then in effect; and (iii) the resolutions,
if any, of Seller's Managing Members approving the transactions contemplated
by this Agreement.
(g) Good Standing Certificates. Seller shall have delivered
to Buyer at the Closing certificates of good standing of Seller from the
Secretary of State of the State of Florida (and any jurisdiction in which
Seller is qualified to do business as a foreign limited liability company) as
of a date not more than fifteen (15) days prior to the Closing Date.
(h) Transaction Documents. Each of the Transaction
Documents shall have been executed and delivered by the parties thereto other
than Buyer.
(i) Opinion of Counsel. Buyer shall have received an
opinion of counsel to Seller, dated as of the Closing Date, substantially in
the form of Exhibit J, subject to such qualifications, limitations, and
exceptions as are reasonably acceptable to Buyer.
(j) Due Diligence. The results of Buyer's due diligence
investigation of Seller and the Purchased Assets shall be satisfactory in all
respects to Buyer, in its sole and absolute discretion. In addition, any and
all audits or other requirements of the SEC concerning Seller and the
transactions contemplated by this Agreement shall have been completed to the
satisfaction of the SEC and Buyer.
(k) Acquisition Financing. ATS shall have obtained third
party financing in an amount and on terms that are acceptable in all respects
to ATS, in its sole and absolute discretion.
(l) Other Deliveries. Seller and Selling Members shall have
delivered or caused to be delivered, such other usual and customary
documents, instruments and certificates as Buyer may reasonably request.
(m) Performance. Seller and Selling Members shall have
performed and complied with the covenants and agreements required by this
Agreement to be performed and complied with by them on or prior to the
Closing Date.
12.2. Conditions Precedent to Obligations of Seller and Selling
Members. The obligation of Seller and Selling Members to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions,
any one or more of which may be waived by Seller and Selling Members:
39
(a) Accuracy of Representations and Warranties. The
representations and warranties of Buyer made in this Agreement, the
Transaction Documents, and any Schedules or certificates furnished pursuant
hereto or thereto shall be true, complete, and correct on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) Consents and Approvals. All consents and approvals
required for the consummation of the transactions contemplated by this
Agreement and the Transaction Documents for which Buyer is responsible to
obtain shall have been obtained by Buyer and delivered to Seller on or before
the Closing Date.
(c) Compliance Certificate. Seller shall have received from
Buyer at the Closing a certificate stating that the conditions specified in
Sections 12.2(a) through 12.2(b) hereof have been fulfilled.
(d) Sole Member's/Secretary's Certificate.
(1) Sole Member's Certificate. Buyer shall have
delivered to Seller at the Closing a sole member's certificate and incumbency
certificate, together with a copy of the following documents, certifying that
such documents are a true and correct copy thereof as of the Closing Date:
(i) Buyer's Certificate of Formation, as then in effect; (ii) Buyer's Limited
Liability Company Agreement, as then in effect; and (iii) the resolutions, if
any, of Buyer approving the transactions contemplated by this Agreement..
(2) ATS Secretary's Certificate. ATS shall have
delivered to Seller at the Closing a secretary's certificate and incumbency
certificate, together with a copy of the following documents, certifying that
such documents are a true and correct copy thereof as of the Closing Date:
(i) Buyer's Certificate of Incorporation, as then in effect; (ii) Buyer's
Bylaws, as then in effect; and (iii) the resolutions of Buyer's Board of
Directors approving the transactions contemplated by this Agreement.
(e) Transaction Documents. Each of the Transaction
Documents shall have been executed and delivered by Buyer.
(f) Opinion of Counsel. Seller and Selling Members shall
have received an opinion of counsel to Buyer, dated as of the Closing Date,
substantially in the form of Exhibit K, subject to such qualifications,
limitations, and exceptions as are reasonably acceptable to Seller and
Selling Members.
(g) Performance. Buyer shall have performed and complied
with the covenants and agreements required by this Agreement to be performed
and complied with by it on or prior to the Closing Date.
13. Survival and Indemnification.
13.1. Survival. The representations and warranties of the
parties contained in this Agreement, any Transaction Document, or in any
certificates delivered pursuant to this Agreement or in connection herewith
40
or therewith will survive the Closing for a period of twenty-four (24) months
from the Closing Date; provided, however, that the representations and
warranties contained in Sections 9.19 (Taxes), 9.7 (Title to Purchased
Assets), 9.8 (Sufficiency of Purchased Assets), 9.18 (Environmental Matters),
and 9.29 (Brokers) (collectively, the "Excepted Representations") shall
survive the Closing until six (6) months following the expiration of the
statute of limitations applicable to the matters covered thereby (after
giving effect to any waiver or extension thereof other than any waiver or
extension granted by Buyer without the consent of Seller). Notwithstanding
the preceding sentence, any representation or warranty in respect of which
indemnity may be sought under this Agreement shall survive the time at which
it would otherwise terminate pursuant to the preceding sentence if written
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given in good faith to the party against whom such
indemnity may be sought prior to such time. All covenants and agreements of
the parties contained in this Agreement or any Transaction Documents will
survive the Closing indefinitely.
13.2. Indemnification by Seller and Selling Members. Seller and
Selling Members, severally and not jointly, shall indemnify, defend, and hold
harmless Buyer, ATS and their respective Affiliates and each of their
respective officers, directors, managers, employees, and agents (the "Buyer
Indemnified Parties") from and against all liabilities, damages (other than
consequential or special damages), losses, costs, and expenses (including
reasonable attorneys' and consultant's fees and expenses) ("Damages")
incurred or suffered by them as a result of, relating to or arising out of,
(i) any failure of any representation or warranty made by Seller or Selling
Members in this Agreement, any Transaction Document, or in any certificates
delivered pursuant to this Agreement to be true and correct as of the date of
this Agreement and as of the Closing (as if made anew at the Closing); (ii)
any breach of any covenant or agreement of Seller or Selling Members in this
Agreement or any Transaction Document; (iii) any liabilities or obligations
of any Seller Indemnified Parties (as defined below), other than the Assumed
Liabilities; or (iv) any third party claims or litigation relating to
incidents occurring on or prior to the Closing Date in connection with the
Printer Business.
13.3. Indemnification by Buyer and ATS. Buyer and ATS, jointly
and severally, shall indemnify, defend, and hold harmless Seller and Selling
Members and their respective Affiliates and each of their respective
officers, directors, managers, employees, and agents (the "Seller Indemnified
Parties"), from and against all Damages incurred or suffered by them as a
result of, relating to or arising out of, (i) any failure of any
representation or warranty made by Buyer or ATS in this Agreement, any
Transaction Document, or in any certificates delivered pursuant to this
Agreement to be true and correct as of the date of this Agreement and as of
the Closing (as if made anew at the Closing); (ii) any breach of any covenant
or agreement of Buyer or ATS in this Agreement or any Transaction Document;
(iii) any liabilities or obligations of any Buyer Indemnified Parties; or
(iv) any third-party claims or litigation relating to incidents occurring
after the Closing Date that relate to the Printer Business, except if
resulting or arising out of (A) any matter for which Seller is obligated to
indemnify any Buyer Indemnified Party or (B) the negligence or misconduct of
Seller.
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13.4. Procedure for Indemnification.
(a) If any person who or which is entitled to seek
indemnification under Section 13.2 or 13.3 (an "Indemnified Party") receives
notice of the assertion or commencement of any claim, demand, action, suit or
proceeding made or brought by any person who or which is not a party to this
Agreement (a "Third Party Claim") against such Indemnified Party with respect
to which the person against whom or which such indemnification is being
sought (an "Indemnifying Party") is obligated to provide indemnification
under this Agreement, the Indemnified Party shall give such Indemnifying
Party reasonably prompt written notice thereof, but in any event not later
than 30 days after receipt of such written notice of such Third Party Claim.
Such notice by the Indemnified Party shall describe the Third Party Claim in
reasonable detail, shall include copies of all available material written
evidence thereof and shall indicate the estimated amount, if reasonably
practicable, of the Damages that has been or may be sustained by the
Indemnified Party. The Indemnifying Party shall have the right to
participate in, or, by giving written notice to the Indemnified Party, to
assume, the defense of any Third Party Claim at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel (reasonably satisfactory
to the Indemnified Party), and the Indemnified Party shall cooperate in good
faith in such defense.
(b) If, within 30 days after giving notice of a Third Party
Claim to an Indemnifying Party, an Indemnified Party receives written notice
from the Indemnifying Party that the Indemnifying Party has elected to assume
the defense of such Third Party Claim, the Indemnifying Party shall not be
liable for any legal expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof; provided, however, that (i) if the
Indemnifying Party fails to take reasonable steps necessary to defend
diligently such Third Party Claim within 30 days after receiving written
notice from the Indemnified Party that the Indemnified Party believes the
Indemnifying Party has failed to take such steps or if the Indemnifying Party
has not undertaken fully to indemnify the Indemnified Party in respect of all
Damages relating to the matter, the Indemnified Party may assume its own
defense, and the Indemnifying Party shall be liable for all reasonable costs
and expenses paid or incurred in connection therewith; and (ii) the
Indemnified Party may employ separate counsel, and the Indemnifying Party
shall bear the reasonable expenses of such separate counsel, if in the
written opinion of counsel to the Indemnified Party use of counsel of the
Indemnifying Party's choice would be expected to give rise to a conflict of
interest. Without the prior written consent of the Indemnified Party, the
Indemnifying Party shall not enter into any settlement of any Third Party
Claim that would lead to loss, liability or create any financial or other
obligation on the part of the Indemnified Party for which the Indemnified
Party is not entitled to indemnification hereunder, or which provides for
injunctive or other non-monetary relief applicable to the Indemnified Party,
or does not include an unconditional release of all Indemnified Parties.
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(c) Any claim by an Indemnified Party on account of Damages
that does not result from a Third Party Claim (a "Direct Claim") shall be
asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, but in any event not later than 30 days after the Indemnified Party
becomes aware of such Direct Claim. Such notice by the Indemnified Party
shall describe the Direct Claim in reasonable detail, shall include copies of
all available material written evidence thereof and shall indicate the
estimated amount, if reasonably practicable, of Damages that has been or may
be sustained by the Indemnified Party. The Indemnifying Party shall have a
period of 30 days within which to respond in writing to such Direct Claim.
If the Indemnifying Party does not so respond within such 30-day period, the
Indemnifying Party shall be deemed to have rejected such claim, in which
event the Indemnified Party shall be free to pursue such remedies as may be
available to the Indemnified Party on the terms and subject to the provisions
of this Agreement.
(d) A failure to give timely notice or to include any
specified information in any notice as provided in this Section 13.4 shall
not affect the rights or obligations of any party hereunder, except and only
to the extent that, as a result of such failure, any party that was entitled
to receive such notice was deprived of its right to recover any payment under
its applicable insurance coverage or was otherwise prejudiced as a result of
such failure.
13.5. Miscellaneous.
(a) Seller's Threshold and Cap. Without duplication of the
Threshold and Cap set forth in Section 13.5(b), Seller shall have no
liability for Damages (either as a result of any Direct Claim or any Third
Party Claim) resulting from any inaccuracy in any representation or warranty
in this Agreement (i) unless and until the aggregate amount of all such
Damages exceed One Hundred Thousand Dollars ($100,000) (the "Threshold"), and
then only for the amount of Damages in excess of the Threshold, or (ii) in
excess of a maximum aggregate amount of liability equal to One Million Five
Hundred Thousand Dollars ($1,500,000) (the "Cap"); provided, however, that
(x) neither the Threshold nor the Cap shall apply to Damages resulting from,
related to or arising out of the inaccuracy of any Excepted Representations
(and such Damages shall be disregarded in calculating whether a party has
suffered Damages in excess of the Threshold), and (y) neither the Threshold
nor the Cap shall apply to Damages resulting from, related to or arising out
of the fraud, willful misconduct or gross negligence of Seller. The
indemnification obligations of Seller shall be applied first as an offset to
the Convertible Note, and then as an offset to the Installment Note.
(b) Selling Member's Threshold and Cap. Without duplication
of the Threshold and Cap set forth in Section 13.5(a), neither of Selling
Members shall have any liability for Damages (either as a result of any
Direct Claim or any Third Party Claim) resulting from any inaccuracy in any
representation or warranty in this Agreement (i) unless and until the
aggregate amount of all such Damages exceed One Hundred Thousand Dollars
($100,000) (the "Threshold"), and then only for the amount of Damages in
excess of the Threshold, or (ii) in excess of a maximum aggregate amount of
liability equal to One Million Five Hundred Thousand Dollars ($1,500,000)
43
(the "Cap") (with the maximum liability of each Selling Member limited to 50%
of the Cap); provided, however, that (x) neither the Threshold nor the Cap
shall apply to Damages resulting from, related to or arising out of the
inaccuracy of any Excepted Representations (and such Damages shall be
disregarded in calculating whether a party has suffered Damages in excess of
the Threshold), and (y) neither the Threshold nor the Cap shall apply to
Damages resulting from, related to or arising out of the fraud, willful
misconduct or gross negligence of a Selling Member. The indemnification
obligations of Selling Members shall be applied first as an offset to the
Convertible Note, and then as an offset to the Installment Note.
(c) Buyer's and ATS's Threshold and Cap. Neither Buyer nor
ATS shall have any liability for Damages (either as a result of any Direct
Claim or any Third Party Claim) resulting from any inaccuracy in any
representation or warranty in this Agreement (i) unless and until the
aggregate amount of all such Damages exceed One Hundred Thousand Dollars
($100,000) (the "Threshold"), and then only for the amount of Damages in
excess of the Threshold, or (ii) in excess of a maximum aggregate amount of
liability equal to One Million Five Hundred Thousand Dollars ($1,500,000)
(the "Cap"); provided, however, that neither the Threshold nor the Cap shall
apply to Damages resulting from, related to or arising out of the fraud,
willful misconduct or gross negligence of Buyer or ATS.
(d) Adjustment in Purchase Price. To the maximum extent
permissible by Law, any amounts which an Indemnifying Party actually pays
under this Section shall constitute, in the case of Seller or Selling
Members, a decrease in the Purchase Price, and in the case of Buyer, an
increase in the Purchase Price.
(e) Exclusive Remedy. The indemnity obligations contained
in this Section shall be the exclusive remedy that any Indemnifying Party may
have to any Indemnified Party with respect to matters arising under this
Agreement. The indemnity obligations contained in this Section are not the
sole remedy of any Party with respect to obligations arising under other
agreements (including, but not limited to, the Key Employee Employment
Agreements, the Selling Member Employment Agreements, and the Noncompetition
Agreement).
(f) Effect of Investigation. The right to indemnification
and all other remedies based on any representation, warranty, covenant or
obligation of Seller or Selling Member on one hand or Buyer or ATS on the
other hand contained in or made pursuant to this Agreement shall not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) by Buyer or ATS on one hand or Seller
and Selling Members on the other hand at any time, whether before or after
the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation. The waiver of any
condition to the obligation of Buyer or Seller and Selling Members to
consummate the transactions contemplated hereby, where such condition is
based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, shall not
affect the right to indemnification or other remedy based on such
representation, warranty, covenant or obligation.
44
14. Termination.
14.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual written consent of the parties hereto;
(b) by Buyer, if there has been a breach or inaccuracy of
any covenant, representation or warranty of Seller or Selling Members
contained in this Agreement that has prevented the satisfaction of any
condition to the obligations of Buyer at the Closing, and such breach or
inaccuracy has not been waived by Buyer or, in the case of a covenant breach,
cured by Seller or Selling Members within the earlier of (i) 10 days after
written notice thereof from Buyer or (ii) the Closing Date;
(c) by Seller and Selling Members, if there has been a
breach or inaccuracy of any covenant, representation or warranty of Buyer or
ATS contained in this Agreement that has prevented the satisfaction of any
condition to the obligation of Seller at the Closing, and such breach or
inaccuracy has not been waived by Seller or, with respect to a covenant
breach, cured by Buyer or ATS within the earlier of (i) 10 days after written
notice thereof by Seller or (ii) the Closing Date;
(d) by Buyer, on the one hand, or Seller and Selling
Members, on the other hand, if the transactions contemplated by this
Agreement have not been consummated by January 3, 2008 for any reason other
than as contemplated by Section 14.1(e); provided, however, that no party
will be entitled to terminate this Agreement pursuant to this Section if such
party's breach of this Agreement has prevented the consummation of the
transactions contemplated by this Agreement; or
(e) by Seller and Selling Members if the transactions
contemplated by this Agreement have not been consummated by January 3, 2008
due to ATS's failure to satisfy the condition precedent described in Section
12.1(k).
14.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 14.1, all further obligations of the parties under this
Agreement (other than pursuant to Section 5.2, which will continue in full
force and effect, and other than pursuant to Section 7.2(a), pursuant to
which Escrow Agent shall release the Deposit Amount to Seller) shall
terminate without further liability or obligation of any party to the other
parties hereunder; provided, however, that no party will be released from
liability hereunder if this Agreement is terminated and the transactions
abandoned by reason of (i) failure of such party to have performed its
material obligations under this Agreement or (ii) any material
misrepresentation made by such party of any matter set forth in this
Agreement. Nothing in this Section 14.2 shall relieve any party to this
Agreement of liability for breach of this Agreement occurring prior to any
termination, or for breach of any provision of this Agreement which
specifically survives termination hereunder.
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15. General Provisions.
15.1. Notice. Any notice required or permitted under this
Agreement shall be given in writing and delivered as described herein. A
notice shall be deemed effectively given as follows: (i) upon personal
delivery; (ii) one (1) business day after transmission by electronic means,
provided such transmission is electronically confirmed as having been
successfully transmitted and a copy of such notice is deposited within 24
hours for either overnight delivery or for registered or certified mail, in
accordance with clause (iii) or (iv) below, respectively; (iii) one (1)
business day after deposit with a reputable overnight courier service,
prepaid for overnight delivery; or (iv) three (3) business days after deposit
with the United States Postal Service, postage prepaid, registered or
certified with return receipt requested. Addresses for notice shall be as
follows, or at such other address as such party may designate by ten (10)
days' advance written notice to the other parties:
If to Seller or Selling Members:
Tonertype of Florida, LLC
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx or Xxxxx X. Xxxxxx XX
With a copy, which shall not constitute notice but shall be delivered at the
same time and by the same means, to:
Akerman Senterfitt
000 X. Xxxxxxx Xx., Xxxxx 0000
Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx or Xxxxxxx X. Xxxxxx
If to Buyer:
TT Acquisition, LLC
c/o American TonerServ Corp.
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President and CEO
With a copy, which shall not constitute notice but shall be delivered at the
same time and by the same means, to:
Xxxxxxxxx XxXxxxxxxx & Xxxxxx LLP
00 Xxxxx X Xxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx X. XxXxxxxxxx or Xxxxxxx X. (DJ) Xxxxxxx
15.2. Time of Essence. Time is of the essence with respect to
the terms, covenants, and conditions contained herein.
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15.3. Entire Agreement. This Agreement, including any other
agreements, exhibits, and schedules to be entered into in connection with the
transactions contemplated hereby and specifically referenced in this
Agreement, constitutes and embodies the entire understanding and agreement of
the parties hereto relating to the subject matter hereof and supersedes all
prior agreements or understandings of the parties hereto, whether written or
oral.
15.4. Construction. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party. Every exhibit, schedule, attachment, or
other appendix attached to this Agreement and referred to herein shall
constitute a part of this Agreement and is hereby incorporated herein by
reference. Any reference to any federal, state, local, or foreign statue or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Unless the context
clearly requires otherwise, (i) plural and singular numbers will each be
construed to include the other; (ii) the masculine, feminine, and neuter
genders will each be construed to include the others; (iii) "shall," "will,"
"must," "agree," and "covenants" are each mandatory; (iv) "may" is
permissive; (v) "or" is not exclusive; and (vi) "includes" and "including"
are not limiting.
15.5. Knowledge. All references to the knowledge of Seller or
Selling Members, or to words of similar import shall be deemed to be
references to the actual knowledge of Selling Members.
15.6. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), but only with the written consent of the party or parties to
be bound thereby. No delay in the exercise of any right or remedy under this
Agreement shall constitute a waiver thereof and the waiver by any party of
any right or remedy under this Agreement on any one occasion shall not be
deemed a waiver of such right or remedy on any subsequent occasion.
15.7. Assignment. This Agreement shall not be assignable by
either party without the prior written consent of the other party, except
that at or prior to the Closing, Buyer may assign its rights and delegate its
duties under this Agreement to ATS or a subsidiary of ATS and may assign its
rights under this Agreement to its lenders for collateral security purposes.
After the Closing Buyer and ATS may assign their respective rights and
delegate their respective duties under this Agreement to any third party,
provided, however that no such assignment shall relieve Buyer or ATS of any
of their liabilities, obligations and duties under this Agreement.
15.8. No Third Party Beneficiaries. Except as expressly provided
herein, nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto, or their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement.
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15.9. Headings. The titles and subtitles used in this Agreement
are used for convenience only and shall not be considered in construing or
interpreting this Agreement.
15.10. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware without regard to the
conflict of laws rules of such state.
15.11. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may
be brought in any court of competent jurisdiction in Hillsborough County,
Florida, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the full extent permitted by
law, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any
such suit, action or proceeding that is brought in any such court has been
brought in an inconvenient form. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court.
15.12. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or
become prohibited or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
15.13. Specific Performance. Each party's obligation under this
Agreement is unique. If any party should default in such party's obligations
under this Agreement, each party acknowledges that it would be extremely
impracticable to measure the resulting damages; accordingly, the
nondefaulting party or parties, in addition to damages and any other
available rights or remedies, may xxx in equity for specific performance, and
the parties hereby expressly waive the defense that a remedy in damages shall
be adequate. The parties also hereby expressly waive any requirement that
the nondefaulting party or parties post a bond or similar security prior to
obtaining and enforcing any specific performance.
15.14. Attorneys' Fees. If any legal action or other proceeding,
including arbitration or action for declaratory relief, is brought for the
enforcement of this Agreement or because of an alleged dispute, breach,
default, or misrepresentation in connection with this Agreement, the
Prevailing Party (as defined below) shall be entitled to recover reasonable
attorneys' fees and other costs, in addition to any other relief to which the
party may be entitled.
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As used in this Agreement, "Prevailing Party" shall include without
limitation: (i) the party who dismisses an action in exchange for sums
allegedly due; (ii) the party who receives performance from the other party
of an alleged breach of covenant of a desired remedy where that is
substantially equal to the relief sought in an action; or (iii) the party
determined to be the prevailing party by a court of law or arbitrator.
15.15. Counterparts and Signature Pages. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
one and the same instrument. The exchange of copies of this Agreement and of
signature pages by facsimile or other electronic transmission shall
constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile or other electronic means
shall be deemed to be their original signatures for all purposes.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement effective as of the date first set forth above.
BUYER:
TT ACQUISITION, LLC,
a Delaware limited liability company
By: AMERICAN TONERSERV CORP.,
a Delaware corporation
Its: Managing Member
By:/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President & CEO
ATS:
AMERICAN TONERSERV CORP.,
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President & CEO
SELLER:
TONERTYPE OF FLORIDA, LLC,
a Florida limited liability company
By:/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, Managing Member
By:/s/ Xxxxx X. Xxxxxx XX
Xxxxx X. Xxxxxx XX, Managing Member
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SELLING MEMBERS:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx XX
Xxxxx X. Xxxxxx XX
50
