EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Introduction
This Stock Purchase Agreement, dated as of February 24, 1998 is by and
among Xxxx X. Xxxxx (the "Shareholder"), Progressive Software, Inc., a North
Carolina corporation (the "Corporation"), Tridex Corporation, a Connecticut
corporation ("Tridex"), and Tridex NC, Inc., a North Carolina corporation and a
wholly owned subsidiary of Tridex (the "Buyer").
Background
The Shareholder owns all of the issued and outstanding capital stock of
the Corporation. The Shareholder desires to sell, and the Buyer desires to
purchase, all of the issued and outstanding shares of capital stock of the
Corporation (the "Shares") for the Purchase Price, pursuant to the terms and
conditions set forth in this Agreement.
Agreements
IT IS MUTUALLY agreed by the parties hereto as follows:
I. Definitions and Construction.
1.1 In addition to the other definitions set forth herein, when used in
this Agreement, the following terms have the meanings set forth below:
"Agreement" means this Agreement.
"Affiliate(s)" means, with respect to any person, any other person
controlling, controlled by or under common control with such person. In this
context, "control" means the possession, directly or indirectly, of the power to
direct the management and policies of such person, whether by contract or
through the ownership of voting securities, membership interests, beneficial
interests or otherwise.
"Audited Closing Balance Sheet" means the audited balance sheet of
the Corporation prepared in accordance with GAAP as at the Closing Date, to be
audited by the Corporation's accountants, McGaladrey & Xxxxxx, LLP ("McGaladrey
& Xxxxxx"), and verified by the Buyer's accountants, Price Waterhouse, LLP
("Price Waterhouse"), as set forth in Section 5.4.
"Balance Sheet" means the balance sheet of the Corporation as at
December 31, 1997, which is included in the Financial Statements.
"Balance Sheet Date" means December 31, 1997.
"Buyer" see Introduction.
5
"Closing" means the taking of the actions required to consummate the
sale of the Shares by the Shareholder and the purchase of the Shares by the
Buyer pursuant to this Agreement.
"Closing Date" see Section 11.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporation" see Introduction.
"Damages" means all losses, claims, damages, costs, fines,
penalties, obligations, payments and liabilities, together with all reasonable
attorneys' fees and expenses, incurred in connection with the foregoing.
"Deficiencies" means a final determination by a Governmental
Authority that additional taxes are due.
"Employee Program" see Section 6.26.
"Escrow Amount" means Five Hundred Thousand Dollars ($500,000),
subject to increase pursuant to Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Financial Statements" means those financial statements prepared in
accordance with GAAP for the year ended December 31, 1996, which were audited by
McGaladrey & Xxxxxx, LLP, the Corporation's independent public accountants,
those financial statements prepared in accordance with GAAP for the year ended
December 31, 1995, which were audited by Xxxxxx Xxxxxxxx, LLP, the Corporation's
independent public accountants for the year ended December 31, 1995, as well as
unaudited financial statements for the year ended December 31, 1997 prepared in
accordance with GAAP (except for the absence of footnotes and normal, recurring
audit adjustments) by the Corporation, copies of which are attached as Schedule
6.5. The Financial Statements for the year ended December 31, 1997 attached as
part of Schedule 6.5 are unaudited as of the date hereof but will be audited and
delivered to Buyer prior to Closing.
"GAAP" means generally accepted accounting principles consistent
with those adopted by the Financial Accounting Standards Board and its
predecessor, as in effect on the date of this Agreement.
"Governmental Authority" means all agencies, authorities, bodies,
boards, commissions, institutions, legislatures and offices of any nature
whatsoever for any governing unit or political subdivision, whether federal,
state, county, district, municipal, city or otherwise, and whether now or
hereafter in existence.
"Hazardous Materials" see Section 6.30.
"Inventories" see Section 6.10.
"Leased Properties" means the real properties leased by the
Corporation.
6
"Legal Requirements" means all statutes, laws, rules, regulations,
orders, judgments, decrees, permits and contracts of any Governmental Authority
including, but not limited to, those relating to employment of labor (for
example, ERISA, equal opportunity, occupational safety and health, worker
adjustment and retraining, wages, hours and the payment of Social Security and
similar taxes), protection of the environment (for example, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.9601 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901 et seq., the
Federal Water Pollution Control Act, the Federal Clean Air Act and state
equivalents, including M.G.L. c. 21C and 21 E), all building, zoning, health,
fire and safety codes and laws imposing taxes or other forms of payment to
Governmental Authorities.
"Liens" means pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever.
"Ordinary Course of Business" means the usual and customary way in
which the Corporation has conducted its business in the past year.
"Parties" means the Shareholder, the Corporation, Tridex and the
Buyer.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Parties" means the Shareholder and the Corporation.
"Shareholder" see Introduction.
"Taxes" means all taxes, fees, assessments, levies, duties and
similar charges imposed by any Governmental Authority, together with all
interest, penalties, fines and other additions imposed in respect thereof,
including, without limitation, all income, corporate excise tax, gains, real
property gains, profits, gross receipts, payroll, employment, social security
(and similar), disability, health, hospitalization, unemployment compensation,
worker's compensation, Pension Benefit Guaranty Corporation, severance, windfall
profits, environmental, license, occupation, customs, imposts, capital stock,
franchise, ad valorem, excise, sales, use, transfer, registration, value added,
alternative minimum, add-on minimum, successor, withholding and estimated taxes
or other charges.
"Tax Returns" means all original and amended returns, declarations,
certifications, statements, notices, elections, estimates, reports, claims for
refund and information returns relating to or required to be filed or maintained
in connection with any Tax, together with all schedules and attachments thereto.
"Treasury" means the United States Department of Treasury.
1.2 In this Agreement, unless the context otherwise requires:
(a) The words "hereby," "hereof," "hereto," "herein," "hereunder"
and any similar words refer to this Agreement; the word "hereafter" means after
the date of this Agreement, and the word "heretofore" means before the date of
this Agreement.
7
(b) The word "person" refers to partnerships (including limited
partnerships and limited liability partnerships), corporations, limited
liability companies, governmental entities, trusts, other legal entities, and
natural persons.
(c) References to the "knowledge," the "best knowledge of," "have no
knowledge of" or "do not know of" and similar phrases mean (i) in the case of a
natural person, the particular fact was actually known, or not actually known,
as the context requires, to such person after reasonable investigation and
inquiry by such person, and (ii) in the case of the Corporation, means the
knowledge or best knowledge of the persons whose names are listed on Schedule
1.2.
1.3. Section and subsection titles are for convenience of reference only
and are not to be considered in the interpretation or construction of any of the
provisions hereof.
II. Purchase and Sale of Shares.
2.1 Subject to the terms and conditions set forth in this Agreement, at
the Closing, the Shareholder will sell and transfer the Shares to the Buyer and
the Buyer will purchase the Shares from the Shareholder.
III. Purchase Price.
3.1 The purchase price payable by the Buyer (the "Purchase Price") in
consideration for the transfer of the Shares shall be Forty Eight Million Five
Hundred Thousand Dollars ($48,500,000), subject to adjustment as provided in
Article V. At least two business days before the Closing Date, the Corporation
shall deliver to the Buyer and Tridex its unaudited income statement (the
"Interim Income Statement") and unaudited balance sheet (the "Interim Balance
Sheet") for the period ending on the Friday before the Closing Date. If Working
Capital (as defined in Section 5.1) calculated on the basis of the Interim
Balance Sheet is less than Eight Million Three Hundred Fifty Thousand Dollars
($8,350,000), then the Escrow Amount shall be increased to equal the difference
between the Required Working Capital (as defined in Section 5.1) and the Working
Capital calculated on the basis of the Interim Balance Sheet.
3.2 In accordance with the 338(h)(10) election, to be made under Section
8.14 hereof, the Parties shall establish and agree upon the modified aggregate
deemed sales price, as defined under applicable Treasury regulations (the
"MADSP"), at which the assets of the Corporation are deemed to have been sold
pursuant to the Section 338(h)(10) election, and the allocation of the MADSP
among the assets of the Corporation. The allocation of the MADSP among the
assets of the Corporation shall be made by the Parties in accordance with
Section 338 of the Code and applicable Treasury regulations. The Parties agree
to file their federal income tax returns, including Treasury Form 8023A,
consistent with such allocation.
IV. Payment of Purchase Price.
4.1 At the Closing, Buyer shall:
(a) deliver to the Shareholder a certificate representing Seven Hundred
Fourteen Thousand (714,000) shares (the "Tridex Shares") of common stock, no par
value, of Tridex ("Tridex Common Stock") subject to reduction as follows: (i) if
the number of shares, or warrants or other securities convertible or exercisable
to obtain shares, of Tridex Common Stock
8
that Tridex is required to provide in connection with subordinated debt
financing obtained by Tridex or the Buyer to fund the transaction hereunder (the
"Sub Debt Financing Shares") exceeds 336,000, then the number of the Tridex
Shares to be delivered to the Shareholder shall be reduced by the remainder (the
"Excess Shares") of (A) the number of Sub Debt Financing Shares, minus (B)
336,000; and (ii) the Closing Cash Payment shall include an amount of cash equal
to (A) the number of Excess Shares, multiplied by (B) Seven Dollars ($7.00) (the
"Excess Shares Value"); and
(b) pay, by wire transfer, an amount in cash (the "Closing Cash Payment")
equal to (i) the Purchase Price (including the Excess Shares Value, if any)
minus (ii) the number of Tridex Shares delivered pursuant to Section 4.1(a)
multiplied by Seven Dollars ($7.00), minus (iii) the Escrow Amount. The Escrow
Amount shall be paid by the Buyer at Closing to Xxxxxxxx, Xxxxx & Xxxxxx (the
"Escrow Agent"), who shall hold such funds in an escrow account (the "Escrow
Account") pursuant to the terms of an Escrow Agreement substantially in the form
attached hereto as Exhibit A (the "Escrow Agreement").
V. Purchase Price Adjustments.
5.1 Working Capital Defined.
The Purchase Price agreed to by the Parties assumes that the Working
Capital of the Corporation on the Closing Date shall equal Eight Million Eight
Hundred Fifty Thousand Dollars ($8,850,000) ("Required Working Capital").
"Working Capital" shall mean the sum of the following amounts, all determined as
of the Closing Date: (i) the Corporation's Inventories valued at the lower of
cost (determined on a first-in, first-out basis) or market value (meaning the
Corporation's market in the ordinary course of its business) in accordance with
GAAP; (ii) the Corporation's accounts receivable (excluding loans or advances to
employees or the Shareholder), less an appropriate allowance for bad debts,
returns, discounts and other customer allowances computed in accordance with
GAAP, minus (iii) the Corporation's trade payables and current accrued
liabilities computed in accordance with GAAP (excluding any deferred revenue
currently estimated at $1,000,000 attributable to the Software License Agreement
between the Corporation and XxXxxxxx'x Corporation dated August 31, 1997), which
shall include, without limitation, professional expenses, insurance, payroll,
commissions, sales, use and other taxes, utilities and other similar expenses.
5.2 Adjustment for Working Capital.
(a) If the amount of the Working Capital as shown on the Audited Closing
Balance Sheet (the "Actual Working Capital") is greater or lesser than the
Required Working Capital, there shall be an increase or decrease, respectively,
in the Purchase Price equal to the amount of the difference between the Actual
Working Capital and the Required Working Capital (the "Working Capital
Adjustment").
(b) If the Actual Working Capital is greater than the Required Working
Capital, then, subject to Section 5.4, (i) the Buyer shall pay to the
Shareholder the amount of the Working Capital Adjustment; and (ii) the Escrow
Agent shall release the balance of the Escrow Account to the Shareholder on or
before ten (10) business days after the expiration of the Review Period (as
defined in Section 5.4(c)).
9
(c) If the Actual Working Capital is less than the Required Working
Capital and the Working Capital Adjustment is less than the Escrow Amount, then,
subject to Section 5.4, prior to expiration of the Review Period, Buyer shall
notify the Escrow Agent and the Shareholder and make a written claim for that
portion of the Escrow Amount that is equal to the Working Capital Adjustment.
(d) If the Actual Working Capital is less than the Required Working
Capital and the Working Capital Adjustment is greater than the Escrow Amount,
then, subject to Section 5.4, prior to expiration of the Review Period, Buyer
shall notify the Escrow Agent and the Shareholder and make a written claim for
the return of all of the Escrow Amount.
5.3 Adjustment for Cash on Hand.
After the adjustment for Working Capital pursuant to Section 5.2,
the Purchase Price shall be increased, subject to Section 5.4(d), by the amount
of the Corporation's cash on hand and in accounts, as set forth on the Audited
Closing Balance Sheet.
5.4 Procedure for Payment of Adjustments.
(a) The adjustment to the Purchase Price for Working Capital
specified in Section 5.2(a) shall be determined based upon the Audited Closing
Balance Sheet. The costs incurred for preparing the Audited Closing Balance
Sheet shall be borne by the Shareholder.
(b) The Selling Parties and the Buyer agree that each will cooperate
with the other so that the Audited Closing Balance Sheet is completed no later
than sixty (60) days after the Closing Date. The Shareholder shall cause
McGaladrey & Xxxxxx (i) to provide access to and, upon request, copies of its
working papers and otherwise to cooperate with Price Waterhouse during and after
the preparation of the Audited Closing Balance Sheet, and (ii) to complete the
Audited Closing Balance Sheet as soon as practicable after the Closing Date.
(c) Upon completion, the Audited Closing Balance Sheet (and the
audited income statement prepared in conjunction therewith) shall be provided to
the Shareholder, the Buyer, Tridex and the Escrow Agent. The Buyer shall have no
more than sixty (60) days from the date of its receipt of the Audited Closing
Balance Sheet (the "Review Period") to review the Audited Closing Balance Sheet
with its own accountants, Price Waterhouse. Tridex will cause Price Waterhouse
to complete its review as soon as practicable after receipt of the Audited
Closing Balance Sheet. The Shareholder and the Corporation agree that the
Audited Closing Balance Sheet shall present fairly in all material respects the
financial condition of the Corporation at the Closing Date in conformity with
GAAP, in a manner consistent with the balance sheet included in the December 31,
1997 audited Financial Statement and, in consideration thereof, Tridex and the
Buyer agree that the Buyer and Price Waterhouse may challenge the Audited
Closing Balance Sheet only on the basis that it has not been so prepared.
(d) If the Buyer has any disagreements with the Audited Closing
Balance Sheet then, prior to the expiration of the Review Period, the Buyer
shall notify the Shareholder and the Escrow Agent in writing of such
disagreements, setting forth the amount and basis for such disagreement. If the
Buyer and the Shareholder cannot resolve the disagreement regarding the Audited
Closing Date Balance Sheet, such disagreement shall be subject to arbitration
pursuant to Section 5.4(f).
10
(e) If the Buyer has made a claim pursuant to Section 5.2(c) or (d)
to all or a portion of the Escrow Amount, the Shareholder shall have ten (10)
days after the Buyer's notice to deliver to the Escrow Agent and the Buyer an
objection in writing to such claim. If the Shareholder does not object to the
claim, the amount of the claim shall be paid to the Buyer by the Escrow Agent,
and the Shareholder shall pay to the Buyer the amount, if any, by which the
Working Capital Adjustment exceeds the Escrow Amount . If the Shareholder
objects to the claim, such objection shall be subject to arbitration pursuant to
Section 5.4(f).
(f) Disputed matters described in Sections 5.4(d)-(e) shall be
submitted by the Shareholder and the Buyer, together with their respective
accountants, to Ernst & Young, LLP (the "Arbitrator") for binding arbitration.
The Shareholder and the Buyer agree that the decision of the Arbitrator with
respect to such matters shall be binding on them and the Escrow Agent and not
subject to further review. The professional fees and expenses of the Arbitrator
shall be borne by the Shareholder if their decision confirms that Buyer is
entitled to receive (by Purchase Price reduction or otherwise) an amount equal
to at least one-half of the amount claimed by Buyer. Otherwise, such fees and
expenses shall be paid by Buyer.
5.5 Reduction for Liabilities Other Than Trade Payables.
In addition to any adjustments made to the Purchase Price based on the
difference between the Required Working Capital and the Actual Working Capital,
the Purchase Price shall be reduced by the total amounts due to third parties
from the Corporation for indebtedness and other liabilities and obligations of
the Corporation, as set forth on the Audited Closing Balance Sheet, subject to
Section 5.4, including but not limited to any indebtedness under the Inventory
and Working Capital Financing Agreement effective August 1, 1997 between the
Corporation and IBM Credit Corporation (the "IBM Credit Agreement"), but
excluding trade payables and current accrued liabilities already excluded from
the calculation of Actual Working Capital pursuant to Section 5.1(iii).
VI. Representations and Warranties of Selling Parties.
The Selling Parties jointly and severally represent and warrant to Tridex
and the Buyer that:
6.1 Corporate Status.
The Corporation is duly organized, validly existing and in good
standing under the laws of the State of North Carolina, with full corporate
power and authority to own its properties and to carry on the business now owned
and carried on by it. The Corporation has all requisite corporate power and
authority to execute and deliver this Agreement. Except as set forth on Schedule
6.1, the Corporation is qualified to do business in all states where its
business requires it to be so qualified except in such states where the failure
to so qualify would not have a material adverse effect on the Corporation's
business or financial condition. A complete list of all states where the
Corporation is so qualified, maintains an office or owns property is set forth
on Schedule 6.1.
6.2 Capitalization and Shareholder.
The authorized capital stock of the Corporation is set forth on
Schedule 6.2. The Shares constitute all of the outstanding shares of capital
stock of the Corporation. All of the
11
Shares are validly issued, fully paid and nonassessable and free of preemptive
rights, and there are no outstanding subscriptions rights, options, calls, puts,
rights, warrants, convertible securities, purchase rights or other agreements,
contracts or commitments obligating the Corporation to issue or to transfer from
its treasury any additional capital shares. Except as specified above, there are
no outstanding or authorized stock appreciation rights, phantom stock, profit
participation or similar rights with respect to the stock of the Corporation.
There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting or transferability of the capital stock of the
Corporation.
6.3 Ownership of Shares.
The Shareholder owns all of the Shares free and clear of all liens,
encumbrances, security interests, claims, restrictions, or rights of any third
parties. There are no holders of shares of stock in the Corporation other than
the Shareholder.
6.4 Subsidiaries.
The Corporation does not have any subsidiaries.
6.5 Financial Statements.
True, correct and complete copies of the Financial Statements have
been or, in the case of the audited Financial Statements for the year ended
December 31, 1997, prior to the Closing will have been, delivered to the Buyer
and attached hereto as Schedule 6.5. The Financial Statements have been prepared
in accordance with GAAP (subject in the case of the unaudited Financial
Statements for the year ended December 31, 1997, to the absence of footnotes and
normal, recurring audit adjustments), and fairly present the financial position
of the Corporation as at the respective dates of the balance sheets included in
the Financial Statements and the results of its operations for the respective
periods indicated.
6.6 Absence of Changes.
Except as disclosed in Schedule 6.6, since the Balance Sheet Date,
there has not been any:
(a) transaction by the Corporation except in the Ordinary Course of
Business;
(b) capital expenditure exceeding $ 50,000 or contract entered into
for the purchase of any capital asset having a cost in excess of $ 50,000;
(c) material adverse change in the financial condition, liabilities,
assets or business of the Corporation;
(d) destruction, damage to or loss of any asset (whether or not
covered by insurance) that materially and adversely affects the financial
condition or business of the Corporation;
(e) loss of a key employee, labor dispute, strike or work stoppage
or other event or condition of any character that materially and adversely
affects the financial condition, business or assets of the Corporation;
12
(f) change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates) by the
Corporation;
(g) revaluation of the Corporation's material assets;
(h) declaration, setting aside or payment of a dividend or other
distribution in respect to the capital shares of the Corporation (except as
permitted under Section 8.8), or any direct or indirect redemption, repurchase
or other acquisition by the Corporation of the Corporation's capital shares;
(i) increase in the salary or other compensation payable or to
become payable to any of the Corporation's officers, directors or the
Shareholder, or the declaration, payment or obligation for the payment of a
bonus or other additional salary or compensation to any such person;
(j) sale or transfer of any asset of the Corporation, except in the
Ordinary Course of Business;
(k) amendment or termination of any material contract, agreement or
license to which the Corporation is a party, except in the Ordinary Course of
Business;
(l) loan by the Corporation to any person or entity, or guaranty of
any loan;
(m) mortgage, pledge or other encumbrance of any asset of the
Corporation;
(n) waiver or release of any material right or claim of the
Corporation, except in the Ordinary Course of Business;
(o) other event or condition of any character that has or that might
reasonably be expected to have a material adverse effect on the financial
condition, business or assets of the Corporation;
(p) issuance or sale of any capital shares of the Corporation, or
issuance of any other securities by the Corporation;
(q) any litigation, arbitration or other legal proceeding commenced
by or against the Corporation;
(r) any agreement, the performance of which will result in any of
the things described in the preceding clauses (a) through (q); or
(s) action taken by the Selling Parties that has or that would
likely result in a revocation of the Corporation's status as an S-Corporation
within the meaning of Section 1361(a) of the Code.
6.7 Absence of Undisclosed Liabilities.
13
The Corporation has no debt, liability or obligation of any nature,
whether accrued, absolute or contingent, and whether due or to become due, that
is not reflected or reserved against in the Balance Sheet except for those that
are disclosed in Schedule 6.7.
6.8 Tax Returns and Audits.
(a) Returns. All Tax Returns required to have been filed by the
Corporation have been timely filed (taking into account duly granted
extensions), and are true, correct and complete in all material respects. Except
as disclosed in Schedule 6.8(a), (i) the Corporation is not currently the
beneficiary of any extension of time within which to file any Tax Return, and
(ii) no claim has ever been made by any Governmental Authority in a jurisdiction
where the Corporation does not file Tax Returns that the Corporation is or may
be subject to taxation by that jurisdiction.
(b) Taxes. All Taxes of the Corporation which have become due
(without regard to any extension of the time for payment and whether or not
shown on any Tax Return), have been paid. Schedule 6.8(b) sets forth a list of
the names and addresses of all Governmental Authorities with the power to assess
a tax upon the Corporation, the business or the assets of the Corporation, and
sets forth the nature of such taxes including, without limitation, sales,
income, property, excise, use and franchise. The Corporation has withheld and
paid over all Taxes required to have been withheld and paid over and has
complied with all information reporting and back-up withholding requirements
relating to Taxes. There are no liens with respect to Taxes on any of the assets
of the Corporation, other than liens for Taxes not yet due and payable or for
Taxes disclosed in Schedule 6.8(b) that are being contested in good faith
through appropriate proceedings.
(c) Deficiencies, Proceedings, Waivers. No Deficiencies exist or
have been asserted or, to the best of the Selling Parties' knowledge, are
expected to be asserted (verbally or in writing), with respect to Taxes of the
Corporation, and the Corporation has not received notice nor, to the best of the
Selling Parties' knowledge, does it expect to receive notice (verbally or in
writing), that the Corporation has not filed a Tax Return or paid all Taxes
required to be filed or paid by them. Except as disclosed on Schedule 6.8(c), no
audit, examination, investigation, action, suit, claim or proceeding relating to
the determination, assessment or collection of any Tax of the Corporation is
currently in process, pending or, to the best of the Selling Parties' knowledge,
threatened (verbally or in writing). Except as disclosed in Schedule 6.8(a), no
waiver or extension of any statute of limitations relating to the assessment of
collection of any Tax of the Corporation is in effect. There are no outstanding
requests for rulings with any Governmental Authority relating to Taxes of the
Corporation.
(d) Tax Sharing Arrangements, Liability for Others' Taxes. The
Corporation is not and has never been (i) a party to any tax sharing agreement
or arrangement (formal or informal, verbal or in writing), or (ii) a member of
an affiliated group of corporations (within the meaning of Code Section 1504)
filing a consolidated federal income Tax Return, or any similar group under
analogous provisions of other law.
(e) Returns Furnished, Tax Attributes. The Corporation has delivered
to the Buyer true and complete copies of all federal, state, local and foreign
income Tax Returns filed by the Corporation for 1994, 1995 and 1996, together
with all related examination reports, statements of deficiencies and closing and
other agreements. Schedule 6.8(c) indicates which, if
14
any, of such returns have been, or currently are, the subject of any audit,
examination or other Tax proceeding.
(f) Elections, Special Status. The Corporation: (i) has not filed a
consent under Code Section 341(f) concerning collapsible corporations; (ii) has
not made any payments, obligated itself to make any payments or become a party
to any agreement that under any circumstance could obligate it or any successor
or assignee to make any payments that are not or will not be deductible under
Code Section 280G or that would be subject to excise Tax under Code Section
4999; (iii) is not a "foreign person" as defined in Code Section 1445(f)(3);
(iv) is not and has not been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable period
specified in Code Section 897(c)(1)(A)(ii); (v) does not own and has not owned
any interest in any "controlled foreign corporation" as defined in Code Section
957 or "passive foreign investment company" as defined in Code Section 1296;
(vi) is not and has not been a party to any agreement or arrangement for which
partnership Tax Returns are required to be filed; (vii) does not own any asset
that is subject to a "safe harbor lease" within the meaning of Code Section
168(f)(8), as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982; (viii) does not own any "tax-exempt use property"
within the meaning of Code Section 168(h) or "tax exempt bond financed property"
within the meaning of Code Section 168(g)(5); and (ix) has not agreed to and is
not required to make any adjustment under Code Section 481(a) by reason of a
change in accounting method or otherwise.
(g) Tax Liability in Financial Statements. The liabilities
(including deferred taxes) shown for Taxes, interest and penalties in the
Financial Statements as of the Balance Sheet Date and to be included on the
Audited Closing Date Balance Sheet are and will be adequate accruals and have
been and will be accrued in a manner consistent with the practices utilized for
accruing tax liabilities in the tax year ended December 31, 1996 and take into
account net operating losses, investment credits and other carryovers for
periods ended prior to the Closing Date.
(h) S-Corporation Status. The Corporation is an S-Corporation within
the meaning of Section 1361(a) of the Code and has been an S-Corporation since
it commenced operations in 1994. The Corporation is currently, has been at all
times since electing to be taxed as an S-Corporation and will at all times from
the execution hereof through the Closing be in compliance with all of the
requirements applicable to qualifying for and maintaining eligibility as an
S-Corporation under the Code, including, without limitation, those restrictions
applicable to the number, type and status of shareholders and classes of stock.
The Corporation has not made, nor prior to the Closing will it make or enter
into any agreement or understanding to make any distribution on account of stock
which is at all disproportionate to the interests of the Shareholders in such
Corporation.
6.9 Real Property.
(a) Schedule 6.9 contains a complete and accurate description of
each parcel of real property leased to the Corporation (the "Leased
Properties"). Copies of all the leases listed in Schedule 6.9 (the "Leases")
have been provided to the Buyer and are valid and in full force, and there does
not exist any default or event that, with notice or passage of time, or both,
would constitute a default under any of the Leases.
15
(b) The Corporation does not own or hold a fee or any other interest
in any real property except as set forth on Schedule 6.9.
(c) To the best of the Selling Parties' knowledge, the zoning of
each of the Leased Properties described in Schedule 6.9 permits the presently
existing improvements and the continuation of the business presently being
conducted on Leased Property. The Corporation has not commenced, nor has the
Shareholder or the Corporation received notice of the commencement of, any
proceeding that would affect the present zoning classification of any of the
Leased Properties. To the best of the Selling Parties' knowledge, the
Corporation does not occupy any real property in violation of any building,
zoning or other law, ordinance, regulation or order relating to the development,
improvement, use or occupancy of real property.
6.10 Inventories.
The inventories shown on the Balance Sheet or existing at the date
hereof (the "Inventories") of the Corporation consist of items of a quality and
quantity useable and salable by the Corporation in the Ordinary Course of
Business. Except as disclosed in Schedule 6.10, all items included in the
Inventories are the property of the Corporation, except for those shown on the
Balance Sheet which have been sold or disposed of in the Ordinary Course of
Business since the Balance Sheet Date; and for each of these sales, either the
purchaser has made full payment, or the purchaser's liability to make payment is
reflected in the books of the Corporation. Schedule 6.10 contains a complete and
accurate list of each location of Inventories. Except as disclosed in Schedule
6.10, no items included in the Inventories have been pledged as collateral or
are held by the Corporation on consignment from others. The Inventories shown on
the Balance Sheet are based on quantities determined by physical count or
measurement, and are valued at the lower of cost (determined on a first-in,
first-out basis) or market value. The Inventories shown on the Audited Closing
Balance Sheet will be based on quantities determined by physical count or
measurement, taken at the Corporation's warehouse and other facilities in New
Jersey and North Carolina within three (3) days of Closing.
6.11 Other Tangible Personal Property.
The books and records of the Corporation contain a complete and
accurate description of all machinery and equipment and all other material
tangible personal property owned by the Corporations and used in connection with
its business. Except as disclosed in Schedule 6.11, no personal property used by
the Corporation in connection with its business is held under any lease,
security agreement, conditional sales contract or other title retention or
security arrangement, or is other than owned by and in the possession and under
the control of the Corporation. Copies of any leases, security agreements or
other documents listed on Schedule 6.11 have been provided to Buyer and are
valid and in full force, and there does not exist any default or event that,
with notice or passage of time, or both, would constitute a default under any of
such leases, security agreements or other documents. The tangible personal
property reflected in those books and records and on Schedule 6.11 constitutes
all such tangible personal property necessary for the conduct by the Corporation
of the business.
6.12 Accounts Receivable.
Schedule 6.12 to this Agreement contains a complete and accurate
schedule of the accounts receivable of the Corporation as at December 31, 1997,
together with an accurate aging
16
of such accounts receivable. All those accounts receivable, and all accounts
receivable of the Corporation arising thereafter, arose from valid sales in the
Ordinary Course of Business.
6.13 Intellectual Property.
(a) Schedule 6.13(a) contains a complete and accurate list of all
trademarks, patents and patent applications, trade names, and registered
copyrights, computer programs and software owned by the Corporation or in which
it has an interest by license, agreement, common law or otherwise and, to the
extent recorded in any form, inventions, processes, discoveries, ideas, designs,
formulas, trade secrets, know-how, concepts, writings or other works used by the
Corporation in and required for the conduct of its business (collectively, the
"Listed Intellectual Property"). Schedule 6.13(a) indicates each instance in
which an item of Listed Intellectual Property is licensed to or otherwise not
owned exclusively by the Corporation and the nature of the Corporation's
interest in such item. To the knowledge of the Corporation and the Shareholder,
no third party is engaged in any activity not duly authorized by the Corporation
which would constitute an infringement of any Listed Intellectual Property or
any inventions, processes, discoveries, ideas, designs, formulas, trade secrets,
know-how, concepts, writings or other works which are used in and material to
the operation of the Corporation's business (collectively, together with the
Listed Intellectual Property, the "Intellectual Property"). There are no claims
or proceedings pending or, to the knowledge of the Corporation or Shareholder,
threatened against the Corporation, nor are there facts or circumstances known
to the Corporation or the Shareholder which could provide the basis for
asserting, that the Corporation has, is or was infringing any patent, trademark,
trade name or other intellectual property rights of any third party.
(b) The Corporation has provided or made available Buyer with true
and correct copies of all contracts, agreements, assignments, security
interests, letters patent, copyright and trademark registrations and
applications therefor and other documents relating to Intellectual Property of
the Corporation. Schedule 6.13(b) is a true and accurate list of such contracts,
agreements, assignments, security interests, letters patent, copyright and
trademark registrations and applications therefor (other than Employee IP
Agreements, as defined in Section 6.13(c)).
(c) Except as described in Schedule 6.13(c), the Corporation has
obtained from all employees, officers, directors, consultants, contractors,
agents and others who have contributed to or participated in the conception and
development of computer software, hardware, point-of-sale systems or
Intellectual Property of the Corporation or who have received copies of or
participated in the creation of source code, drawings, plans or specifications
of the Corporation, a written agreement acknowledging the Corporation's
ownership thereof (or assigning all rights therein to the Corporation) and
agreeing to maintain the confidentiality of all such material (the "Employee IP
Agreements"). The form of such Employee IP Agreement is attached as Schedule
6.13(c). None of the former or current members of management or key personnel of
the Corporation, including all former and current employees, agents,
consultants, contractors and others who have contributed to or participated in
the conception and development of computer software, hardware, point-of-sale
systems or other Intellectual Property of the Corporation has asserted or
threatened in writing any claim against the Corporation or any of its
subsidiaries in connection with the involvement of such persons in the
conception and development of any computer software, hardware, point-of-sale
systems or other Intellectual Property of the Corporation and to the best
knowledge of the Shareholder and the Corporation no basis exists for any such
claim.
17
(d) (i) Except as set forth on Schedule 6.13(a) or (b), the
Corporation owns the entire right, title and interest in and to the Listed
Intellectual Property and none of the Intellectual Property owned by the
Corporation is subject to any outstanding orders, decrees, judgments,
stipulations, claims or settlements specifically applicable to the Corporation
by name or as a party, nor is any item of such Intellectual Property subject to
any option, lease, covenant, condition, agreement (written or oral), Lien, or
other claim or restriction.
(ii) Except as set forth in Schedule 6.13(b) the Corporation
has not granted any license and rights to any other Person with respect to any
Intellectual Property owned by the Corporation.
(iii) Except as set forth in Schedule 6.13(b), there are no
contracts in effect for the conversion, modification or enhancement of software
licensed or sold by the Corporation. Except as set forth in Schedule 6.13(b),
there are no marketing agreements or other arrangements, including but not
limited to value-added reseller, distributor or sales agent, for the direct or
indirect marketing of the Corporation's products.
(iv) Except as listed in Schedule 6.13(d), all royalties owed
under any licenses to or by the Corporation for the period up to and including
the Closing have been paid and there exists no default by the Corporation or, to
the Corporation's knowledge, by any other party under the terms of said licenses
and no event has occurred which, upon the passage of time or the giving of
notice, or both, would result in any event of default by the Corporation or, to
the Selling Parties' knowledge, by any other party to any license or prevent the
Corporation from exercising and obtaining the benefits of any rights of the
Corporation contained therein other than those which, in the aggregate, would
not reasonably be expected to have a material adverse effect on the business or
results of operation of the Corporation.
(e) Other than as set forth in Schedule 6.13(e):
(i) there is no suit, claim, action, investigation or
proceeding pending or, to the best knowledge of the Selling Parties, threatened
that the Corporation is infringing on or otherwise violating the rights of any
person with regard to any Intellectual Property and, to the best knowledge of
the Selling Parties, there is no basis for any such suit, claim, action,
investigation or proceeding;
(ii) to the best knowledge of the Selling Parties, no person
is infringing on or otherwise violating any right of the Corporation with
respect to any Intellectual Property owned by, licensed to and/or otherwise used
by the Corporation;
(iii) the execution and delivery of this Agreement, compliance
with its terms and the consummation of the transactions contemplated hereby do
not and will not conflict with or result in any violation, breach or default
(with or without notice or lapse of time or both) under, or give rise to any
right, license or Lien relating to, Intellectual Property owned by the
Corporation or with respect to which the Corporation now has or has had any
license or other agreement with any third party, or any right of termination,
cancellation or acceleration of any material Intellectual Property right or
obligation set forth in any license or other agreement to which the Corporation
is a party, or the loss or encumbrance of any Intellectual Property or material
benefit related thereto, or result in or require the creation, imposition or
extension of any Lien upon any Intellectual Property or right;
18
(iv) no licenses or rights have been granted to distribute the
source code of, or to use the source code to create Derivative Works (as
hereinafter defined) of, any product currently marketed by, commercially
available from or under development by the Corporation; and
(v) the Corporation has taken reasonable and necessary steps
to protect its Intellectual Property and its rights thereunder; to the best
knowledge of the Selling Parties, no such rights to Intellectual Property have
been lost or are in jeopardy of being lost through failure to act by the
Corporation.
As used herein "Derivative Work" shall mean a work that is based upon one
or more preexisting works, such as a revision, enhancement, modification,
abridgment, condensation, expansion or any other form in which such preexisting
works may be recast, transformed or adapted, and which, if prepared without
authorization of the owner of the copyright in such preexisting work, would
constitute a copyright infringement. For purposes hereof, a Derivative Work
shall also include any compilation that incorporates such a preexisting work as
well as translations from one human language to another and from one type of
code to another.
6.14 Title to and Condition of Assets.
The Corporation has good and marketable title to all assets, whether
real, personal, mixed, tangible or intangible, owned and currently used by it in
the conduct of its business (including, without being limited to, all assets
referred to or reflected in the Balance Sheet) free and clear of restrictions on
or conditions to transfer or assignment, and free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights of way,
covenants, conditions or restrictions, except for (a) those disclosed on
Schedule 6.14 to this Agreement; (b) the lien of current taxes not yet due and
payable; and (c) possible minor matters that, in the aggregate, are not
substantial in amount and do not materially detract from or interfere with the
present or intended use of any of these assets, or materially impair the
business operations of the Corporation. All of the material tangible personal
property of the Corporation is in good operating condition and repair, ordinary
wear and tear excepted. The Corporation is in possession of all of the Leased
Properties. Other than as set forth on Schedule 6.14 neither the Shareholder,
nor any officer or director of the Corporation, nor any spouse or child of any
of the foregoing persons nor, to the best knowledge of the Shareholder, any
employee of the Corporation, has any interest, directly or indirectly, in any of
the real or personal property owned by or leased to the Corporation or any
Intellectual Property licensed by the Corporation. The assets (i) reflected on
the Balance Sheet, (ii) acquired after the Balance Sheet Date or (iii) set forth
on Schedule 6.11 constitute all assets and property necessary for the operation
of the Business.
6.15 Customers and Distributors; Suppliers.
(a) Schedule 6.15(a) sets forth any customer, customer
representative or distributor (whether pursuant to a commission, royalty or
other arrangement) who accounted for more than 5% of the sales of the
Corporation for either the year ended December 31, 1997 or the year ended
December 31, 1996 (collectively, the "Customers and Distributors"). No Customer
or Distributor has given notice to the Corporation of its intention to
terminate, to cancel or otherwise materially and adversely modify its
relationship with the Corporation or to decrease
19
materially or limit its services, supplies or materials to the Corporation or
its usage, purchase or distribution of the services or products of the
Corporation.
(b) Schedule 6.15(b) sets forth a true and complete list of all
suppliers of the Corporation to whom it made payments aggregating $100,000 or
more during each of the years ended December 31, 1997 and December 31, 1996,
showing, with respect to each, the name, address and dollar volume involved.
6.16 Insurance Policies.
Schedule 6.16 contains a list of all insurance policies held by the
Corporation concerning its business and properties, including the type and
amount of coverage and the annual premium. The Corporation has maintained and
now maintains in full force and effect (a) insurance on all of its assets and
business of a type customarily insured, covering property damage and loss of
income by fire or other casualty, and (b) insurance protection against all
liabilities, claims and risks against which it is customary to insure, both with
respect to the amount and nature of the coverage. True and correct copies of all
insurance policies have been provided to Buyer.
6.17 Other Contracts.
Except for the agreements listed in Schedule 6.17, copies of which
have been furnished to the Buyer, the Corporation is not a party to, nor is any
of the Corporation's property bound by, any distributor's or manufacturer's or
sales representative or agency agreement, any output or requirements agreement,
any agreement not entered into in the Ordinary Course of Business, any loan
agreement, indenture, mortgage, lease or guaranty agreement, or any other
material agreement that is unusual in nature, duration or amount. To the
knowledge of the Selling Parties, there is no default or event that, with notice
or passage of time, or both, would constitute a default by any party to any of
these agreements. The Corporation has not received notice that any party to any
of these agreements intends to cancel or terminate any of these agreements or to
exercise or not exercise any options under any of these agreements. To the
knowledge of the Selling Parties, the Corporation is not a party to, nor is any
of the Corporation's property bound by, any agreement that is materially adverse
to the business, properties or financial condition of the Corporation.
6.18 Compliance with Laws.
(a) The Corporation has complied with all Legal Requirements, the
consequences of a violation of which could have a material adverse effect on its
operations, and with all orders, judgments and decrees of any tribunal under
applicable Legal Requirements.
(b) The Corporation has not directly or indirectly paid or delivered
any fee, commission or other money or property, however characterized, to any
finder, agent, government official or other party, in the United States or any
other country, that is in any manner related to the business or operations of
the Corporation and that the Shareholder or the Corporation knows or has reason
to believe to have been illegal under any Federal, state or local law of the
United States or any other country having jurisdiction. The Corporation has not
participated, directly or indirectly, in any boycott or other similar practice
affecting any of its actual or potential customers.
20
6.19 Litigation.
Except as disclosed in Schedule 6.19, there is no suit, action,
arbitration, or legal, administrative or other proceeding, or governmental
investigation pending or, to the best of the Selling Parties' knowledge,
threatened against, involving or affecting the Corporation or any of its
business, assets or financial condition. The matters set forth in Schedule 6.19,
if decided adversely to the Corporation, will not result in a material adverse
change in the business, assets or financial condition of the Corporation. The
Shareholder or the Corporation has furnished or made available to the Buyer
relevant court papers and other documents relating to the matters set forth in
Schedule 6.19. The Corporation is not in default with respect to any order,
writ, injunction or decree of any Federal, state, local, or foreign court,
department, agency or instrumentality. Except as set forth in Schedule 6.19, the
Corporation is not presently engaged in any legal action to recover moneys due
or on account of damages sustained which affect the Corporation, its business
assets or financial condition.
6.20 Agreement Will Not Cause Breach or Violation.
Except as set forth as Schedule 6.20, the consummation of the
transactions contemplated by this Agreement will not result in or constitute any
of the following: (a) a default or an event that, with notice or passage of
time, or both, would be a default, breach or violation of the certificate of
incorporation or bylaws of the Corporation, any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, or other agreement,
instrument or arrangement to which the Shareholder or the Corporation is a party
or by which they or any of their property are bound; (b) an event that would
permit any party to terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of the Corporation; or (c) the creation or
imposition of any Lien, on any of the properties of the Corporation.
6.21 Authorization and Validity.
Each of the Corporation and the Shareholder has the full corporate
or individual power, legal capacity and authority to execute, deliver and
perform its obligations under this Agreement and the other agreements
contemplated hereby to which the Corporation or the Shareholder is a party, and
to consummate the transactions contemplated hereby. Upon execution of this
Agreement and the other agreements contemplated hereby to which the Corporation
or the Shareholder is a party, such agreements shall constitute the legal and
binding obligations of the Corporation and the Shareholder, as the case may be,
and shall be enforceable against each of them in accordance with their terms,
subject to general principles of equity, applicable bankruptcy, insolvency,
moratorium and similar laws and principles of public policy which may limit
enforcement.
6.22 Interest in Customers, Suppliers and Competitors.
Except as disclosed in Schedule 6.22, neither the Shareholder, nor
any other officer or director of the Corporation, nor any spouse or child of any
of the foregoing persons, has any direct or indirect interest (other than the
beneficial ownership of not more than one percent (1%) of the outstanding equity
securities of a publicly traded issuer) in any competitor, supplier or customer
of the Corporation, or in any person from whom or to whom the Corporation leases
any real or personal property, or in any other person with whom the Corporation
is doing business.
21
6.23 Corporation's Documents.
The Shareholder and the Corporation have furnished to the Buyer for
examination true, correct and complete (a) copies of the certificate of
incorporation and bylaws of the Corporation; (b) copies of all of the
Corporation's corporate records with respect to all proceedings, consents,
actions and meetings of the shareholders and board of directors of the
Corporation as in existence on the date hereof. The Shareholder is the only
person to whom the Corporation has ever issued any shares of capital stock.
6.24 Personnel; Employee Matters.
(a) Employee Census. Schedule 6.24(a)(i) contains a complete current
employee census, listing the name, position, exempt or non-exempt status,
employment date, age, current compensation, three-year compensation history,
benefit plan participation and geographic location. Schedule 6.24(a)(ii)
contains a complete and accurate list of all employees who are currently on
leave of absence or receiving workers' compensation or disability benefits and
whom the Corporation expects to return to work, as well as a complete and
accurate list of all former employees who are currently receiving severance
benefits or continuation of medical insurance coverage under COBRA, with a
description and the date of expiration of such severance benefits.
(b) Cash Compensation. Schedule 6.24(b) contains a complete and
accurate description of (i) all increases in cash compensation including,
without limitation, wages, salaries, bonuses (discretionary and formula) and
other cash compensation (the "Cash Compensation") of all employees of the
Corporation earning Thirty Thousand Dollars ($30,000) or more annually during
the current and immediately preceding fiscal year of the Corporation and (ii)
any promised increases in Cash Compensation to such employees that have not yet
been effected.
(c) Compensation Plans. Schedule 6.24(c) contains a complete and
accurate list of all compensation plans or arrangements (the "Compensation
Plans") sponsored by the Corporation or to which the Corporation contributes on
behalf of its employees, other than Employee Programs listed in Schedule 6.26.
The Compensation Plans include, without limitation, plans, arrangements or
practices that provide for severance pay, deferred compensation, incentive,
bonus or performance awards and stock ownership or stock options. The
Corporation has provided the Buyer a copy of each written Compensation Plan and
a written description of each unwritten Compensation Plan.
(d) Employment Agreements. Schedule 6.24(d) contains a complete and
accurate list of all employment agreements (the "Employment Agreements") to
which the Corporation is a party with respect to its employees. The Employment
Agreements include, without limitation, all temporary employee agreements and
non-competition agreements. The Corporation has provided the Buyer a copy of
each written Employment Agreement and a written description of each unwritten
Employment Agreement.
(e) Employee Policies and Procedures. Schedule 6.24(e) contains a
complete and accurate list of all employee manuals, policies, procedures and
work-related rules (the "Employee Policies and Procedures") that apply to
employees of the Corporation. The
22
Corporation has provided the Buyer a copy of all written Employee Policies and
Procedures and a written description of all unwritten Employee Policies and
Procedures.
(f) Unwritten Amendments. To the best of the Selling Parties'
knowledge, no unwritten amendments have been made, whether by oral
communication, pattern of conduct or otherwise, with respect to any Compensation
Plans, Employment Agreement or Employee Policies and Procedures.
(g) Labor Compliance.
(i) Except as set forth in Schedule 6.24(g), the Corporation
(A) has been and is in compliance with all material laws, rules, regulations and
ordinances respecting employment and employment practices, terms and conditions
of employment and wages and hours, and (B) is not liable for any arrears of
wages or penalties for failure to comply with any of the foregoing.
(ii) The Corporation has not engaged in any unfair labor
practice or discriminated on the basis of race, color, religion, sex, national
origin, age, or disability in its employment conditions or practices.
(iii) There are no (A) unfair labor practice charges or
complaints or racial, color, religious, sex, national origin, age or disability
discrimination charges or complaints pending or, to the best of the Selling
Parties' knowledge, threatened, against the Corporation before any Federal,
state or local court, board, department, commission or agency, nor does any
basis therefor exist or (B) existing or, to the best of the Selling Parties'
knowledge, threatened, labor strikes, disputes, grievances, controversies or
other labor troubles affecting the Corporation nor, to the best of the Selling
Parties' knowledge, does any basis therefor exist.
(h) Unions. The Corporation has never been a party to any agreement
with any union, labor organization or collective bargaining unit. No employees
of the Corporation are represented by any union, labor organization or
collective bargaining unit. To the best knowledge of the Corporation, the
employees of the Corporation have no intention to and have not threatened to
organize or join a union, labor organization or collective bargaining unit.
(i) Aliens. To the best of the Selling Parties knowledge, all
employees of the Corporation are citizens of, or are authorized to be employed
in, the United States. The Corporation has complied fully with all applicable
laws, rules and regulations of Governmental Authority requiring new employees to
provide proof of United States citizenship or employment authorization.
6.25 Powers of Attorney/Bank Accounts.
Schedule 6.25 contains a list of (i) the names and addresses of all
persons holding a power of attorney on behalf of the Corporation; and (ii) the
names and addresses of all banks or other financial institutions in which the
Corporation has an account, deposit or safe deposit box, with the names of all
persons authorized to draw on these accounts or deposits, or to have access to
these boxes.
6.26 Employee Programs.
23
(a) Schedule 6.26 sets forth a list of every Employee Program (as
defined below) that has been maintained (as such term is further defined below)
by the Corporation at any time during the three (3) year period ending on the
date hereof.
(b) Each Employee Program which has been maintained by the
Corporation and which has at any time been intended to qualify under Section
401(a) or 501(c)(9) of the Code has received a favorable determination,
notification, opinion or approval letter from the IRS regarding its
qualification under such section and has, in fact, been qualified under the
applicable section of the Code from the effective date of such Employee Program
through and including the Closing (or, if earlier, the date that all of such
Employee Program's assets were distributed). No event or omission has occurred
which would cause any such Employee Program to lose such qualification under the
applicable Code section.
(c) Except as otherwise disclosed on Schedule 6.26, there has not
been any failure of any party to comply with any laws applicable to or the terms
of any Employee Programs that have been maintained by the Corporation, except
for any failures to comply that, individually or in the aggregate, would not
have a material adverse effect on the properties, financial condition,
operations or prospects of the Corporation. With respect to any Employee Program
now or heretofore maintained by the Corporation, there has occurred no
"prohibited transaction," as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code,
or breach of any duty under ERISA or, to the best of the Selling Parties'
knowledge, other applicable law (including, without limitation, any health care
continuation requirements or any other tax law requirements, or conditions to
favorable tax treatment, applicable to such plan), which could result, directly
or indirectly (including, without limitation, through any obligation of
indemnification or contribution), in any taxes, penalties or other liability to
the Corporation or any ERISA Affiliate (as defined below). No litigation,
arbitration or governmental administrative proceeding (or investigation) or
other proceeding (other than those relating to routine claims for benefits) is
pending or, to the best of the Selling Parties' knowledge, threatened, with
respect to any such Employee Program.
(d) Neither the Corporation nor any ERISA Affiliate of the
Corporation has ever maintained any Employee Program subject to Title IV of
ERISA.
(e) Except as otherwise disclosed on Schedule 6.26, with respect to
each Employee Program maintained by the Corporation within the three years
preceding the date hereof, complete and correct copies of the following
documents (if applicable to such Employee Program) have previously been
delivered to the Buyer: (i) all documents embodying or governing such Employee
Program and any funding medium for the Employee Program (including, without
limitation, trust agreements) as they may have been amended to the date hereof;
(ii) the most recent IRS determination, notification, opinion or approval letter
with respect to such Employee Program under Code Section 401 or 501(c)(9) and
any applications for determination or approval subsequently filed with the IRS;
(iii) the three most recently filed IRS Forms 5500, with all applicable
schedules and accountants' opinions attached thereto; (iv) the summary plan
description for such Employee Program (or other descriptions of such Employee
Program provided to employees) and all modifications thereto; (v) any insurance
policy (including any fiduciary liability insurance policy) related to such
Employee Program; and (vi) any documents evidencing any loan to an Employee
Program that is a leveraged employee stock ownership plan.
24
(f) The Corporation has not made any written or, to the best
knowledge of the Shareholder, oral representations to its employees inconsistent
with the written description of any Employee Program maintained by the
Corporation as of the date hereof.
(g) There are no unfunded obligations under any Employee Program
providing benefits after termination of employment to any employee or former
employee of the corporation (or to any beneficiary or dependent of any employee
or former employee), including, but not limited to, retiree health coverage and
deferred compensation, but excluding continuation of health coverage required to
be continued under Section 4980B of the Code and insurance conversion privileges
under state law.
(h) For purposes of this Section 6.26:
(i) "Employee Program" means (a) all employee benefit plans
within the meaning of ERISA Section 3(3) including, but not limited to, multiple
employer welfare arrangements (within the meaning of ERISA Section 3(40)), plans
to which more than one unaffiliated employer contributes and employee benefit
plans (such as foreign or excess benefit plans) that are not subject to ERISA.
In the case of an Employee Program funded through an organization described in
Code Section 501(c)(9), each reference to such Employee Program shall include a
reference to such organization;
(ii) an entity "maintains" an Employee Program if such entity
sponsors, contributes to or provides (or has promised to provide) benefits under
such Employee Program, or has any obligation (by agreement or under applicable
law) to contribute to or provide benefits under such Employee Program, or if
such Employee Program provides benefits to or otherwise covers employees of such
entity (or their spouses, dependents, or beneficiaries);
(iii) an entity is an "ERISA Affiliate" of the Corporation for
purposes of this Section 6.26 if it would have ever been considered a single
employer with the Corporation under ERISA Section 4001(b) or part of the same
"controlled group" as the Corporation for purposes of ERISA Section
302(d)(8)(c).
6.27 Millennium Capability; Status of Debugging.
(a) For purposes of this Section 6.27, software will be "Millennium
Capable" if it will accurately process Date Data without error or interruption
caused by such Date Data, where dates are before, after and during December 31,
1999, the year 2000 and subsequent years, including, but not limited to,
recognizing the year 2000 as a leap year, providing correct results when moving
backwards and forwards between the 20th and 21st century, and functioning
without error or interruption related to or caused by such Date Data. "Date
Data" means any information relating to dates expressed in days, months and
calendar years.
(b) The Corporation's software product known as the Intelligent
Restaurant Information System (IRIS), when used in conjunction with the
Windows-NT operating system, and in accordance with the Corporation's other
specifications for such software, including without limitation those
specifications related to hardware, is Millennium Capable.
(c) Except as set forth on Schedule 6.27(c), the Corporation's
software product known as Sophisticated Multi-Unit Advanced Restaurant
Technology ("SMART"), when used in conjunction with the DOS operating system and
in accordance with the
25
Corporation's other specifications for such software is Millennium Capable. No
representation or warranty is made pursuant to this Section 6.27(c) regarding
the capability of the SMART software to prevent any error or interruption
related to Date Data which is caused by hardware, operating system software or
other computer system components not included in the existing SMART
installations and sold by the Corporation.
6.28 Consents.
Except as set forth on Schedule 6.28, no consent, authorization,
approval, permit or license (each a "Consent") of, or filing with, any
Governmental Authority, any lessor, lender or any other person or entity is
required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the agreements contemplated hereby
on the part of the Selling Parties.
6.29 Adverse Agreements.
The Corporation is not a party to any agreement or instrument, or
subject to any charter or other corporate restriction, or any judgment, order,
writ, injunction, decree, rule or regulation that materially and adversely
affects, or so far as the Corporation can now foresee, may in the future
materially and adversely affect, the condition (financial or otherwise),
operations, assets, liabilities or business of the Corporation.
6.30 Environmental Matters.
(a) Except as used in compliance with Environmental Law and as set
forth in Schedule 6.30, (i) the Corporation has never generated, transported,
used, stored, treated, disposed of, or managed any Hazardous Waste (as defined
below); (ii) no Hazardous Material (as defined below) has ever been or is
threatened to be spilled, released, or disposed of by the Corporation at any
site presently or formerly owned, operated, leased, or used by the Corporation,
or, to the Selling Parties' knowledge, has ever come to be located in the soil
or groundwater at any such site; (iii) to the Selling Parties' knowledge, no
Hazardous Material has ever been transported from any site presently or formerly
owned, operated, leased, or used by the Corporation for treatment, storage, or
disposal at any other place; (iv) there are no underground storage tanks on the
premises of the Corporations' headquarters facility in Charlotte, North Carolina
and, to the Selling Parties' knowledge, the Corporation does not presently own,
operate, lease, or use, nor has the Corporation previously owned, operated,
leased, or used any other site on which underground storage tanks are or were
located; and (v) no lien has ever been imposed by any Governmental Entity on the
property which includes the Corporation's Charlotte, North Carolina headquarters
and, to the Selling Parties' knowledge, no lien has ever been imposed by an
Governmental Entity on any other property, facility, machinery, or equipment
owned, operated, leased, or used by the Corporation in connection with the
presence of any Hazardous Material.
(b) Except as set forth in Schedule 6.30 hereto, (i) the Corporation
has no liability under, nor has the Corporation ever violated in any material
respect, any Environmental Law (as defined below); (ii) the property which
includes the Corporation's Charlotte, North Carolina headquarters is presently
in compliance and, to the Selling parties' knowledge, any other property owned,
operated, leased, or used by the Corporation and any facilities and operations
thereon are presently in compliance in all material respects with all applicable
Environmental Laws and no capital expenditure will be required to maintain such
compliance; (iii) the
26
Corporation has never entered into or been subject to any judgment, consent
decree, compliance order, or administrative order with respect to any
environmental or health and safety matter or received any request for
information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law (as defined below);
and (iv) neither the Corporation nor the Shareholder has any reason to believe
that any of the items enumerated in clause (iii) of this paragraph will be
forthcoming.
(c) Except as set forth in Schedule 6.30, the property which
includes the Corporation's Charlotte, North Carolina headquarters does not
contain and, to the Selling Parties' knowledge, no other site owned, operated,
leased, or used by the Corporation contains any asbestos or asbestos-containing
material, any polychlorinated biphenyls (pcbs) or equipment containing pcbs, or
any urea formaldehyde.
(d) For purposes of this Section 6.30: (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, or contaminant,
as defined or regulated under any Environmental Law or any other substance which
may pose a threat to the environment or to human health or safety; (ii)
"Hazardous Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii) "Environmental Law" shall mean any
environmental laws, regulation, rule, ordinance, or by-law at the foreign,
federal, state, or local level, existing as of the date hereof; and (iv) "the
Corporation" shall mean and include the Corporation, its predecessors and all
other entities for whose conduct the Corporation is or may be held responsible
under any Environmental Law.
6.31. Warranty and Related Matters. There are no product liability,
warranty or other similar claims against the Corporation existing or, to the
knowledge of the Selling Parties, threatened in writing, alleging that any of
its products or services are defective or fail to meet any product or service
warranties except as disclosed in Schedule 6.31. The Corporation has not
received notice of any statements, citations, correspondence or decisions by any
Governmental Entity stating that any product manufactured, marketed or
distributed at any time by the Corporation (the "Corporation Products") is
defective or unsafe or fails to meet any product warranty or any standards
promulgated by any such Governmental Entity. There is no (a) latent or overt
design, manufacturing or other defect known to the Selling Parties in any
Product or (b) liability for warranty or other claim or return with respect to
any Corporation Product except in the ordinary course of business consistent
with the past experience of the Corporation for such kinds of claims and
liabilities; provided, however, that this Section 6.31 shall not apply to any
matter related to Date Data.
6.32 Full Disclosure.
None of the representations and warranties made herein by the
Selling Parties, or made in any certificate delivered pursuant to this
Agreement, furnished or to be furnished by them or on their behalf, contain or
will contain any untrue statement of a material fact, or omit any material fact
the omission of which would be misleading.
VI. A. Investment Representations and Warranties of Shareholder.
6A.1 Tridex Shares Restricted.
27
Shareholder understands that the Tridex Shares to be issued to Shareholder
will, until registered pursuant to the Registration Rights Agreement, be
restricted and that:
(a) the Tridex Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or the laws of any other jurisdiction
and are being sold in reliance upon an exemption from such registration. The
Tridex Shares cannot be sold or transferred by Shareholder unless they are
subsequently registered under applicable law or an exemption from registration
is available. Except as set forth in the Registration Rights Agreement, neither
Tridex nor Buyer is required to register the Tridex Shares nor to make any
exemption from registration available; and
(b) Shareholder's right to sell or transfer Tridex Shares will be
restricted as set forth herein, and the certificates representing the Tridex
Shares may bear a legend, which includes restrictions against sale or transfer
in violation of applicable securities laws, and which requires that Shareholder
furnish an opinion of counsel that any proposed sale or transfer will not
violate such laws and other restrictions and requirements.
6A.2 Information Provided to Shareholder.
Shareholder has: (a) been furnished with all documents and information
concerning Tridex which he has requested; (b) had the opportunity to ask
questions and receive answers from Tridex concerning the Tridex Shares and to
obtain any additional information necessary to verify the accuracy of the
information furnished; and (c) relied only on the foregoing information and
documents in determining to make an investment in the Tridex Shares.
6A.3 Accredited Investor Status.
Shareholder is an "accredited investor," as defined in Rule 501 under the
Securities Act, and is acquiring the Tridex Shares for his own account and not
on behalf of any other person, and is acquiring the Tridex Shares for investment
purposes only, and not with a view to resale or distribution thereof.
Shareholder has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of investing in Tridex.
Shareholder recognizes that the information furnished by Tridex does not
constitute investment, accounting, legal or tax advice. Shareholder is relying
on his own professional advisers, if any, for such advice. Shareholder
recognizes that an investment in the Tridex Shares involves substantial risks
and has determined that the Tridex Shares are a suitable investment.
VII. Representations and Warranties of Tridex and Buyer.
Tridex and the Buyer jointly and severally represent and warrant to the
Shareholder that:
7.1 Corporate Status; Authorization; Consents.
(a) Each of Tridex and the Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation;
(b) each of Tridex and the Buyer has the full corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the other
agreements contemplated hereby to which it is a party, and to consummate the
transactions contemplated hereby; (c) upon execution of this Agreement and the
other agreements contemplated hereby to which Tridex or the Buyer is a party,
this Agreement and such other agreements shall constitute the legal and binding
obligations of Tridex or the
28
Buyer, as the case may be; (d) no consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority is required
to be made or obtained by Tridex or the Buyer in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement.
7.2 SEC Reports and Financial Statements.
Tridex has filed with the SEC, and has heretofore made available to
Shareholder, true and complete copies of all forms, reports, schedules,
statements and other documents required to be filed by it since December 31,
1996 under the Exchange Act or the Securities Act (such forms, reports,
schedules, statements or schedules included therein, are referred to as the
"Tridex SEC Documents"). The Tridex SEC Documents, at the time filed, (a) did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. Except to the extent
that information contained in any Tridex SEC Document has been revised or
superseded by a subsequently filed Tridex Filed SEC Document (as defined in
Section 7.3) (a copy of which has been made available to Shareholder prior to
the date hereof), none of the Tridex SEC Documents contains an untrue statement
of a material fact or omits to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Tridex included in the Tridex SEC
Documents comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by Form
10-Q) and fairly present (subject, in the case of the unaudited statements, to
normal, recurring audit adjustments) the consolidated financial position of
Tridex and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended.
7.3 Absence of Certain Changes or Events.
Except as disclosed in the Tridex SEC Documents filed and publicly
available prior to the Closing (the "Tridex Filed SEC Documents"), since
December 31, 1996, Tridex and its subsidiaries have conducted their respective
business only in the ordinary course, and there has not been (i) any material
adverse change with respect to Tridex, (ii) any declaration, setting aside or
payment of any dividend or other distribution with respect to its capital stock
or any redemption, repurchase or other acquisition of any of its capital stock,
(iii) any split, combination or reclassification of any of its capital stock or
any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, (iv)
any damage, destruction or loss, whether or not covered by insurance, that has
or reasonably could be expected to have a material adverse effect on Tridex or
(v) any material change in accounting methods, principles or practices by
Tridex.
7.4 No Undisclosed Liabilities.
29
Except as and to the extent set forth in the Tridex Filed SEC Documents,
neither Tridex nor any of its subsidiaries has any liabilities of any nature,
whether or not accrued, contingent or otherwise, that would be reasonably
expected to have a material adverse effect on Tridex.
VIII. Selling Parties' Obligations before Closing.
From the date of this Agreement until the Closing, the Selling
Parties agree that:
8.1 Access to Premises and Information.
Tridex, the Buyer and their counsel, accountants and other
representatives will have full access during normal business hours to all
properties, books, accounts, records, contracts and documents of or relating to
the Corporation. The Shareholder will furnish or cause to be furnished to
Tridex, the Buyer and their representatives all data and information concerning
the business, finances and properties of the Corporation that are reasonably
requested by Tridex, Buyer or their representatives.
8.2 Conduct of Business in Ordinary Course.
The Corporation will diligently conduct its affairs in the Ordinary
Course of Business, and will not make or institute any unusual or novel methods
of manufacture, purchase, sale, lease, management, accounting or operation that
will vary materially from those methods used by the Corporation during the
twelve (12) month period ending on the date of this Agreement. The obligations
set forth in this section include, but are not limited to, the specific
obligations set forth hereafter in this Article VIII.
8.3 Preservation of Business and Relationships.
The Corporation will use its best efforts to preserve its business
organization intact, to keep available to the Corporation its present officers
and employees and to preserve the Corporation's present relationships with
suppliers, customers and others having material business relationships with the
Corporation.
8.4 Maintenance of Corporate and Tax Status.
The Corporation will not (a) amend its certificate of incorporation
or bylaws; (b) issue any shares of capital stock; (c) issue or create any
warrants, obligations, subscriptions, options, convertible securities, or other
commitments under which any additional shares of its capital stock of any class
might be directly or indirectly authorized, issued or transferred from treasury;
(d) take any action that would likely result in a revocation of its status as a
S-Corporation within the meaning of Section 1361(a) of the Code; or (e) agree to
do any of the acts listed in this Section 8.4(a) through (d) above.
30
8.5 Maintenance of Insurance.
The Corporation will maintain its existing insurance policies and
coverage, subject to variations in amounts required by the ordinary operations
of its business. At the request of the Buyer and at the Buyer's sole expense,
the amount of insurance against fire and other casualties which, at the date of
this Agreement the Corporation carries on any of its properties or in respect of
its operations, shall be increased by such amount or amounts as the Buyer
specifies.
8.6 Employees and Compensation.
The Corporation will not do, nor will it agree to do, any of the
following: (a) make any change in compensation payable to or to become payable,
to any officer, employee (except in the Ordinary Course of Business), sales
agent, or representative; or (b) make any change in benefits payable to any
officer, employee (except in the Ordinary Course of Business), sales agent, or
representative under any bonus or pension plan or other contract or commitment.
8.7 New Transactions.
The Corporation will not do, nor will it agree to do any of the
following acts, without the Buyer's prior written consent: (a) enter into any
contract, commitment or transaction not in the Ordinary Course of Business; (b)
enter into any contract, commitment or transaction in the Ordinary Course of
Business involving an amount exceeding $10,000, individually; (c) make any
capital expenditures in excess of $10,000 for any single item, or enter into any
leases of capital equipment or property under which the annual lease charge is
in excess of $10,000; or (d) sell or dispose of any capital assets with a net
book value exceeding $10,000, individually; provided that the Corporation may
sell a 1997 Chevrolet truck to Xxxxx Investments, an Affiliate of the
Shareholder, for no less than its fair market value.
8.8 Dividends, Distributions and Acquisitions of Stock.
The Corporation will not: (a) declare, set aside or pay any
dividend, or make any distribution in respect of, its capital stock, except for
the distribution of up to $300,000 to the Shareholder between January 1, 1998
and the Closing Date; (b) directly or indirectly purchase, redeem or otherwise
acquire any shares of its capital stock; or (c) enter into any agreement
obligating it to do any of the foregoing prohibited acts.
8.9 Payment of Liabilities and Waiver of Claims.
Except as disclosed in Schedule 8.9, the Corporation will not do,
nor will it agree to do, any of the following: (a) pay any obligation or
liability, fixed or contingent, other than current liabilities incurred in the
Ordinary Course of Business; (b) waive or compromise any right or claim in
excess of $10,000; or (c) cancel, without full payment, any note, loan or other
obligation owing to the Corporation.
31
8.10 Existing Agreements.
The Corporation will not modify, amend, cancel or terminate any of
its existing material contracts or agreements, or agree to modify, amend, cancel
or terminate any of its existing material contracts or agreements.
8.11 Documentation of Procedures and Trade Secrets.
At the request of the Buyer, the Corporation will document and
describe any of its trade secrets, processes or business procedures specified by
the Buyer in form and content satisfactory to the Buyer.
8.12 Representations and Warranties True at Closing.
Neither the Shareholder nor the Corporation will take, or will agree
to take, any action that will result in any representation or warranty being
untrue or incorrect at any time from the date of this Agreement to the Closing.
8.13 Consents of Others.
As soon as reasonably practical after the execution and delivery of
this Agreement, and in any event on or before the Closing, the Shareholder will
obtain the written consent of the persons described in Schedule 6.28 to this
Agreement and will furnish to the Buyer executed copies of those consents.
8.14. 338(h)(10) Election.
At the request of Tridex, the Selling Parties, Buyer and Tridex shall
jointly make a valid, timely and effective election under Section 338(h)(10) of
the Code with respect to Buyer's purchase of Shares from Shareholder.
IX. Conditions Precedent to Buyer's Performance.
The obligations of the Buyer under this Agreement are subject to the
satisfaction, at or before the Closing, of all the conditions set out below. The
Buyer may waive any or all of these conditions in whole or in part without prior
notice; provided, however, that no such waiver of a condition shall constitute a
waiver by the Buyer of any of the Buyer's other rights or remedies, at law or in
equity.
9.1 Accuracy of Selling Parties' Representations and Warranties.
Except as otherwise permitted by this Agreement, all representations
and warranties by the Selling Parties in this Agreement, or in any written
statement that is delivered to the Buyer pursuant to this Agreement, will be
true in all material respects on and as of the Closing as though made at that
time.
32
9.2 Performance by Selling Parties.
The Selling Parties will have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by the Shareholder or the
Corporation on or before the Closing.
9.3 No Material Adverse Change.
During the period from the date hereof until the Closing, there will
not have been any material adverse change in the financial condition, results of
operations or business of the Corporation, and the Corporation will not have
sustained any material loss or damage to its assets, whether or not insured. A
material adverse change in the business of the Corporation includes, but is not
limited to, the occurrence of an event or change in facts or circumstances which
would cause any material assumption underlying the Plan B Financial Forecast
attached hereto as Schedule 9.3 to cease to be accurate and reasonably be
expected to cause total revenues under such plan to be decreased by more than
$1,000,000.
9.4 Audited Financial Statements.
The Shareholder shall have delivered to the Buyer a complete and
accurate copy of the Corporation's financial statements prepared in accordance
with GAAP for the year ended December 31, 1997, audited by McGaladrey & Xxxxxx,
showing net sales of at least $33,707,000, and earnings before interest, taxes,
depreciation and amortization ("EBITDA") of at least $3,700,000.
9.5 Opinion of Selling Parties' Counsel.
The Buyer will have received from Xxxxxxxxxx Xxxxxxxx LLP, counsel
for the Selling Parties, an opinion dated the day of the Closing, in form and
substance satisfactory to the Buyer and the Buyer's counsel, that:
(a) the Corporation is validly existing and in good standing under
the laws of the state of its incorporation and has all necessary corporate power
to own its properties as now owned and to operate its business as now operated;
(b) the authorized capital shares of the Corporation is as set forth
on Schedule 6.2, and, based entirely on a certificate from the Shareholder (as
to which such counsel has no knowledge of any inconsistent facts or
circumstances), all outstanding shares are validly issued, fully paid and
nonassessable, and there are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or commitments obligating
the Corporation to issue or transfer from treasury any additional capital share
of any class;
(c) this Agreement has been duly and validly authorized by the
Corporation and, when executed and delivered by the Selling Parties, this
Agreement will be valid and binding on the Selling Parties and enforceable in
accordance with its terms, except as limited by general principles of equity,
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally, and public policy;
(d) based entirely on a certificate from the Shareholder (as to
which such counsel has no knowledge of any inconsistent facts or circumstances),
the Shareholder owns,
33
beneficially and of record, all the issued and outstanding capital shares of the
Corporation free and clear of all liens, encumbrances, equities, options,
claims, charges and restrictions, and the Shareholder has full power to transfer
such shares to the Buyer without obtaining the consent or approval of any other
person or Governmental Authority;
(e) except as disclosed in Schedule 6.19, counsel has no knowledge,
without independent investigation, of any suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending or
threatened against, or affecting the Corporation business or properties, or
financial or other condition;
(f) neither the execution nor delivery of this Agreement nor the
consummation of the transactions contemplated in this Agreement will constitute
(i) a default or an event that would, with notice or passage of time, or both,
constitute a default under, or violation or breach of, the Corporation's
certificate of incorporation, bylaws, or to such counsel's knowledge, any
indenture, license, lease, franchise, mortgage, instrument or other agreement
identified on the Schedules to this Agreement to which the Corporation is a
party or by which the properties of the Corporation may be bound, or (ii) to
such counsel's knowledge, an event that would permit any party to any such
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of the Corporation, or (iii) to such counsel's
knowledge, an event that would result in the creation or imposition of any lien,
charge or encumbrance on any asset of any of the Corporation; and
(g) to such counsel's knowledge, every consent, approval,
authorization or order of any court or governmental agency or body that is
required for the consummation by the Corporation and the Shareholder of the
transactions contemplated by this Agreement has been obtained and is in effect
on the day of the Closing.
9.6 Absence of Litigation.
No action, suit or proceeding before any court or any governmental
body or authority, challenging the transactions contemplated by this Agreement,
will have been instituted or threatened on or before the Closing.
9.7 Buyer's Acquisition Financing. The Buyer shall have closed
transactions providing financing in an amount totaling at least Thirty-One
Million Dollars ($31,000,000), consisting of senior bank financing and
subordinated debt financing from institutional investors, subject only to
completion of the Closing hereunder; provided, however, that if all conditions
set forth in this Article IX other than this Section 9.8 have been satisfied or
waived and the Closing has not occurred on or before April 31, 1998, Tridex
shall pay to the Corporation the sum of One Hundred and Fifty Thousand Dollars
($150,000) plus, upon presentation of invoices for reasonable professional fees
and expenses greater than $150,000 incurred by the Corporation solely in
connection with the transactions described in this Agreement, an additional
payment of up to Fifty Thousand Dollars ($50,000) to reimburse the Corporation
for its actual expenses in an aggregate amount not to exceed Two Hundred
Thousand Dollars ($200,000).
9.8 Payoff of Corporation Loans to Shareholder and Affiliates. Any and
all loans or advances from the Corporation to the Shareholder, Xxxxx
Investments, Inc. or any other Affiliate of the Shareholder shall be paid in
full, with such payment documented to the reasonable satisfaction of Buyer.
34
9.9 Consents.
Each of the Consents listed on Schedule 6.28, including but not limited to
the Consents of XxXxxxxx'x Corporation and Micros Systems, Inc., shall have been
obtained by the Corporation, provided that the Corporation shall not be required
to obtain a consent from the landlord of its Colorado office.
9.10 Release of IBM Lien.
The Corporation shall have obtained, subject only to the payment in full
of amounts due under the IBM Credit Agreement, a release and termination on
UCC-3 for each financing statement on UCC-1 on record regarding the security
interest securing the loan under the IBM Credit Agreement (the "IBM Releases").
9.11 Headquarters Lease.
The Shareholder shall cause the Xxxxx Family Limited Partnership, the
landlord (the "Landlord") under the lease for the Corporation's headquarters in
Charlotte, North Carolina to obtain from the Landlord's mortgage lender a
subordination, non-disturbance and attornment Agreement among such lender,
Landlord and the Corporation, in form reasonably satisfactory to Tridex and
Buyer. In addition, if Tridex receives a report from a qualified independent
leasing professional, mutually acceptable to Shareholder and Tridex, that the
fair market rent for the headquarters facility is less than $28,500, the
Shareholder shall cause the Landlord to amend such lease to reduce the rent to
the fair market rent.
9.12 Auto Leases.
The Corporation shall terminate or assign, and shall have paid to the
lessor all fees, charges and penalties required in connection such termination
or assignment, all leases to which the Corporation is a party or for which it is
otherwise liable for motor vehicles, other than the two (2) 1996 Honda vans, the
two (2) 1998 Ford vans and the one (1) 1996 GMC Yukon truck.
X. Conditions Precedent to Shareholder's Performance.
The obligations of the Shareholder under this Agreement are subject
to the satisfaction, at or before the Closing, of the following conditions:
10.1 Accuracy of Buyer's Representations and Warranties.
All representations and warranties by the Buyer contained in this
Agreement, or in any written statement delivered by the Buyer pursuant to this
Agreement, will be true in all material respects on and as of the Closing Date
as though such representations and warranties were made on and as of that date.
10.2 Buyer's Performance.
The Buyer will have performed and complied in all material respects
with all covenants and agreements and satisfied all conditions which it is
required by this Agreement to perform, comply with or satisfy, before or at the
Closing.
35
10.3 Opinion of Buyer's Counsel.
The Shareholder will have received from Xxxxxxxx, Xxxxx & Xxxxxx,
counsel for the Buyer, an opinion dated the day of the Closing, in form and
substance satisfactory to the Shareholder and counsel for the Selling Parties,
to the effect that: (a) the Buyer is a corporation in good standing under the
laws of the State of Connecticut and has all requisite corporate power and
authority to perform its obligations under this Agreement; (b) all corporate
proceedings required by law or by the provisions of this Agreement to be taken
by the Buyer on or before the Closing, in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement, have been duly and validly taken; (c) the Buyer has the
corporate power and authority to acquire the Shares for the consideration set
forth in this Agreement; (d) this Agreement, the Registration Rights Agreement
(as defined in Section 10.4) and the Consulting and Employment Agreement (as
defined in Section 11.2(a)) have been duly and validly authorized by Buyer and,
when executed and delivered by the Buyer, will be valid and binding on the Buyer
and enforceable in accordance with their respective terms, except as limited by
general principles of equity, bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally, and public policy; (e) every
consent, approval, authorization or order of any court or governmental agency or
body that is required for the consummation by the Buyer of the transactions
contemplated by this Agreement has been obtained and is in effect on the day of
the Closing (f) the Tridex Shares, when issued, will be duly authorized, validly
issued, fully paid and nonassessable.
10.4 Registration Rights Agreement.
The Buyer will have executed a Registration Rights Agreement (the
"Registration Rights Agreement") substantially in the form of Exhibit B between
the Buyer and Shareholder covering the Tridex Shares.
10.5 Absence of Litigation.
No action, suit or proceeding before any court or any governmental
body or authority, challenging the transaction contemplated by this Agreement or
to its consummation, will have been instituted or threatened on or before the
Closing.
XI. Closing.
11.1 Time and Place.
The consummation of the sale and purchase of the Shares by the
Shareholder and the Buyer pursuant to this Agreement (the "Closing") will take
place at the offices of Xxxxxxxx, Xxxxx & Xxxxxx, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 beginning at 10:00 a.m. on April 3, 1998, or at such other
time and place to which the parties may agree in writing (the "Closing Date"),
but in no event later than April 3, 1998.
36
11.2 Shareholder's Obligations at the Closing.
At the Closing, the Shareholder will deliver to the Buyer the
following, all documents to be in form and substance reasonably satisfactory to
the Buyer and the Buyer's counsel:
(a) A certificate or certificates representing the Shares,
registered in the name of the Shareholder duly endorsed for transfer to the
Buyer and accompanied by stock powers or other instrument of assignment of the
Shares to the Buyer duly executed by the Shareholder.
(b) The Corporation's minute book showing all of the Corporation's
corporate records with respect to all proceedings, consents, actions and
meetings of the shareholders and board of directors of the Corporation and the
corporate seal of the Corporation.
(c) The opinion of counsel to the Corporation and Shareholder as
provided in Section 9.5.
(d) A certificate of the president and treasurer of the Corporation
and the Shareholder respecting the continued truth of the Selling Parties'
representations and warranties, the performance by the Selling Parties of, or
the compliance by the Selling Parties with, any covenant or obligation required
to be performed or complied with by the Selling Parties and the absence of any
change in the financial condition or results of operations of the Corporation,
except changes occurring in the Ordinary Course of Business during the period
from the Balance Sheet Date to the Closing that, in the aggregate, are not
materially adverse, and such other changes or transactions, if any, as
contemplated by this Agreement.
(e) A certificate of the secretary of the Corporation regarding the
votes taken to authorize the transactions contemplated under this Agreement and
the incumbency of the offices of the Corporation.
(f) Except as otherwise specified by the Buyer, the written
resignations of all the officers and directors of the Corporation.
(g) A Consulting Agreement between the Corporation and the
Shareholder substantially in the form attached hereto as Exhibit C (the
"Employment and Consulting Agreement"), and an Employee IP Agreement, each duly
executed by the Shareholder.
(h) Employment Agreements between each employee of the Corporation
listed on Exhibit D-1 (each a "Key Employee") and the Corporation substantially
in the form attached hereto as Exhibit D-2 (the "Key Employee Agreements"), duly
executed by the Key Employees.
(i) The Escrow Agreement, duly executed by the Shareholder.
(j) The Registration Rights Agreement, substantially in the form of
Exhibit B attached hereto, duly executed by the Shareholder.
(k) A General Release executed by the Shareholder, dated the day of
the Closing, to be in form and substance reasonably satisfactory to counsel for
the Shareholder and the Buyer.
37
(l) All consents, elections and other documentation or filings which
the Buyer reasonably believes to be required or advisable in connection with the
making of an election to have the transaction under this Agreement taxed under
the provisions of Section 338(h)(10) of the Code with respect to the
Corporation, together with a limited power of attorney irrevocably authorizing
the Buyer to file the same with the Internal Revenue Service.
(m) The Consents listed on Schedule 6.28.
(n) All documents, including but not limited to votes of the board
of directors of the Corporation and signature cards, necessary to redesignate
the officers and employees who will have authority with respect to the bank
accounts identified on Schedule 6.25.
(o) The amendment of the lease, executed by the Landlord, and the
subordination, nondisturbance and attornment agreement, executed by the Landlord
and its mortgage lender, as set forth in Section 9.11.
(p) Documentation of the termination or assignment of automotive
leases, as set forth in Section 9.12.
(q) The IBM Releases.
11.3 Buyer's Obligations at the Closing.
At the Closing, the Buyer will pay the Closing Cash Payment as
provided in Section 4.1(b) and will deliver to the Shareholder the following:
(a) A certificate for the Tridex Shares, substantially in the form
attached hereto as Exhibit E, including the legends placed on the reverse
thereof.
(b) A certificate of the president and treasurer of the Corporation
respecting the continued truth of the Buyer's representations and warranties,
the performance by the Buyer of, or the compliance by Buyer with, any covenant
or obligation required to be performed or complied with by the Buyer.
(c) A certificate of the secretary of the Buyer regarding the votes
taken to authorize the transactions contemplated under this Agreement (including
the initial election of Shareholder to the Board of Directors of the Buyer) and
the incumbency of the officers of the Buyer.
(d) The opinion of the counsel as provided in Section 10.3.
(e) The Employment and Consulting Agreement between the Corporation
and the Shareholder, duly executed by the Corporation.
(f) The Key Employee Agreements. duly executed by the Corporation.
(g) The Escrow Agreement, duly executed by the Buyer and the Escrow
Agent.
38
(h) The Registration Rights Agreement, duly executed by the Buyer.
XII. Indemnity.
12.1 Indemnification by the Shareholder. Subject to the other provisions
of this Article XII, the Shareholder shall indemnify and hold Tridex, Buyer,
their Affiliates and their respective employees, representatives, officers,
directors and agents (the "Buyer Indemnitees") harmless from and against any and
all Damages suffered by any Buyer Indemnitee arising out of:
(a) the breach of any representation or warranty made by any of the
Selling Parties in this Agreement or in any certificate delivered by any of the
Selling Parties at the Closing;
(b) the breach of any covenant by any of the Selling Parties in this
Agreement; or
(c) after the Closing Date, the failure by any of the Selling
Parties to perform any of their respective obligations under this Agreement;
provided, however, that no claim for indemnification under this Section 12.1
shall be made by the Buyer Indemnitees unless and until the Buyer Indemnitees
have incurred Damages in excess of One Hundred Thousand ($100,000) (the "Buyer
Threshold Amount"). Once the Buyer Indemnitees have incurred Damages in excess
of the Threshold Amount, the Buyer Indemnitees shall be entitled to
indemnification for all Damages suffered by the Buyer Indemnitees. In no event
shall the Shareholder's obligations for indemnification under this Section 12.1
exceed Five Million Dollars ($5,000,000) and in no event shall Shareholder's
obligations for indemnification with respect to Section 6.27 exceed Seven
Hundred Fifty Thousand Dollars ($750,000). Except for claims regarding a breach
of Sections 6.3, 6.8 and 6.27, the Buyer Indemnitees shall not be permitted to
make claims after the first anniversary of the Closing Date, provided that any
liability with respect to any claim, or notice of proposed claim, that is made
in writing prior to the first anniversary of the Closing Date shall survive
until finally determined and paid. The Buyer Indemnitees shall be permitted to
make claims regarding a breach of Sections 6.3 until, but not later than, the
second anniversary of the Closing Date, provided that any liability with respect
to any such claim, or notice of proposed claim, that is made in writing prior to
the second anniversary of the Closing Date shall survive until finally
determined and paid. The Buyer Indemnitees shall be permitted to make claims
regarding a breach of Section 6.8 or 6.27 until, but not later than, the third
anniversary of the Closing Date, provided that any liability with respect to any
such claim, or notice of proposed claim, that is made in writing prior to the
third anniversary of the Closing Date shall survive until finally determined and
paid.
12.2 Indemnification by Buyer. Subject to the other provisions of this
Article XII, Buyer shall indemnify and hold the Shareholder, and his heirs,
executors, personal representatives, successors and assigns (the "Shareholder
Indemnitees") harmless from and against any Damages suffered by any Seller
Indemnitee arising out of:
(a) the breach of any representation or warranty made by Buyer in
this Agreement or in any certificate delivered by Buyer at the Closing;
(b) the breach of any covenant by Buyer in this Agreement or in any
other agreement executed and delivered at the Closing;
(c) after the Closing Date, the failure by Buyer to perform any of
its obligations under this Agreement provided, however, that no claim for
indemnification under this Section
39
12.2 shall be made by the Shareholder Indemnitees unless and until the
Shareholder Indemnitees have incurred Damages in excess of One Hundred Thousand
Dollars ($100,000) (the "Shareholder Threshold Amount"). Once the Shareholder
Indemnitees have incurred Damages in excess of the Threshold Amount, the
Shareholder Indemnitees shall be entitled to indemnification for all Damages
suffered by the Shareholder Indemnitees. In no event shall the Buyer's
obligations for indemnification under this Section 12.2 exceed Five Million
Dollars $5,000,000. The Shareholder Indemnitees shall not be permitted to make
claims after the first anniversary of the Closing Date, provided that any
liability with respect to any such claim, or notice of proposed claim, that is
made in writing prior to the first anniversary of the Closing Date shall survive
until finally determined and paid.
12.3 Notice and Resolution of Claims.
Each indemnified party (a "Beneficiary") shall promptly give written
notice to the indemnifying party after obtaining knowledge of any claim that the
Beneficiary may have pursuant to this Article XII. Such notice shall set forth
in reasonable detail the claim and the basis for indemnification. The
indemnifying party shall have thirty (30) days within which to review the notice
provided by the Beneficiary. If the indemnifying party agrees to pay the claim
for indemnification as presented, the indemnifying party shall promptly pay the
Beneficiary the amount of such claim. If the indemnifying party disputes the
claim, the indemnifying party shall provide written notice of such dispute to
the Beneficiary prior to the expiration of the thirty (30) day review period. If
the indemnifying party and the Beneficiary cannot resolve such dispute through
negotiation within thirty (30) days of the date of the indemnifying party's
notice of dispute, the parties shall submit the dispute to binding arbitration
under the rules of, and before the American Arbitration Association in
Baltimore, Maryland (the "Arbitration"). The decision of the Arbitration shall
be final and binding upon the indemnifying party and the Beneficiary. The
indemnifying party and the Beneficiary shall share equally the fees, costs and
expenses of the Arbitration. If the indemnifying party fails to dispute the
claim for indemnification within the thirty (30) day review period, the claim
shall be paid by the indemnifying party to the Beneficiary in the amount
originally claimed. If the indemnifying party and the Beneficiary are able to
resolve a disputed claim, the claim shall be paid in the amount agreed. If a
disputed claim is arbitrated, the claim shall be paid by the indemnifying party
in the amount determined by the Arbitration. Failure to dispute a claim,
resolution of a dispute through negotiation of the parties, or the decision of
the Arbitration shall constitute final determination of a claim for
indemnification (in each instance, an "Allowed Claim"). The indemnifying party
shall promptly pay or reimburse the Beneficiary, as appropriate, the amount of
an Allowed Claim. The Shareholder acknowledges and agrees that the Buyer shall
have the right to offset against any amounts due the Shareholder, the full
amount of any and all Allowed Claims made by Buyer against the Selling Parties;
provided that Buyer has made written demand for payment by the Shareholder of a
finally determined claim, and such claim remains unpaid ten (10) days after such
demand.
12.4 Right to Assume Defense.
If a claim for indemnity shall arise from a claim or action
involving a third party (a "Third Party Claim"), the Beneficiary shall permit
the indemnifying party to assume its defense. If the indemnifying party assumes
the defense of such Third Party Claim, it shall take all reasonable steps
necessary to investigate, defend or settle such claim and, to the extent
required by this Agreement, shall hold the Beneficiary harmless from and against
any and all Damages caused by or arising out of any settlement approved by the
indemnifying party or any
40
judgment in connection with such Third Party Claim. Without the written consent
of the Beneficiary, the indemnifying party shall not consent to entry of any
judgment or enter into any settlement that does not include an unconditional and
complete release of the Beneficiary with respect to the Third Party Claim by the
claimant making the Third Party Claim. The Beneficiary may participate in such
defense or settlement through its own counsel, but at its own expense. Any
settlement shall be subject to the Beneficiary's consent, which consent shall
not be unreasonably withheld or delayed.
12.5 Insurance Proceeds. Notwithstanding any other provision of this
Section XII to the contrary, the Buyer Indemnitees shall not be entitled to any
recovery from the Shareholder under this Section XII for any Damages which are
attributable to matters for which any Buyer Indemnitee has received, or is
entitled to receive, proceeds of insurance under a policy which was in effect at
the Closing with respect to the matter for which indemnification is otherwise
available hereunder, provided that the availability of insurance coverage for
any such claim shall not require a Buyer Indemnitee to make or prosecute an
insurance claim as a condition to exercising rights to receive indemnification
from Shareholder under this Section XII.
XIII. Publicity.
13.1 Subject to the Buyer's obligations under the Exchange Act and other
applicable Legal Requirements, all public announcements and notices to third
parties concerning the transactions contemplated by this Agreement will be
jointly planned, coordinated and approved by the Buyer and the Shareholder. No
party will act unilaterally in this regard without the prior approval of the
other; however, this approval will not be unreasonably withheld or delayed.
XIV. No Broker.
14.1 Each of the parties represents and warrants that it has not dealt
with any broker or finder in connection with any of the transactions
contemplated by this Agreement and, insofar as each party knows, no broker or
other person is entitled to any commission or finder's fee in connection with
any of these transactions. Tridex has engaged Xxxxxx Brothers, Inc. to act as
its financial advisor for purposes of this transaction, and Tridex is
responsible for payment of any and all fees, commissions and expenses of Xxxxxx
Brothers, Inc., and agrees to indemnify and hold the Shareholder harmless for
any and all fees, commissions and expenses due to Xxxxxx Brothers, Inc.
XV. Expenses.
15.1 Each party will pay all costs and expenses incurred or to be
incurred by the party in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement. Seller will
pay all state and local Taxes due as a result of the purchase and sale
hereunder.
41
XVI. Entire Agreement; Amendment; Waiver.
16.1 This Agreement and the schedules and exhibits attached hereto
constitute the entire agreement between the parties pertaining to the subject
matter contained in it, and supersede all prior and contemporaneous agreements,
representations and understandings of the parties. No supplement, modification
or amendment of this Agreement will be binding unless executed in writing by all
of the parties. No waiver of any of the provisions of this Agreement will be
effective unless in writing; no waiver will constitute a waiver of any other
provision; and no waiver of a breach of any provision of this Agreement will
operate to waive any subsequent breach.
XVII. Counterparts.
17.1 This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
XVIII. Parties in Interest.
18.1 Nothing in this Agreement, whether express or implied, is intended
to confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
will any provision give any third persons any right of subrogation or action
against any party to this Agreement.
XIX. Successors and Assigns.
19.1 This Agreement will be binding on, and will inure to the benefit of,
the parties and their respective successors, assigns, heirs or personal
representatives.
XX. Further Assurances.
20.1 The Shareholder from time to time will execute and deliver such
additional documents and instruments and take such additional actions as may be
necessary to carry out the transactions contemplated by this Agreement
including, but not limited to, any documents required to complete or confirm the
assignment and transfer by the Shareholder to the Corporation of any and all
right, title and interest he has or had, at any time, to the Intellectual
Property of the Corporation.
XXI. Survival.
21.1 All representations, warranties, covenants and agreements of the
Parties contained in this Agreement, or in any instrument, certificate or
opinion provided for herein, will survive the Closing, subject to the limits set
forth in Section XII.
42
XXII. Notices.
22.1 Any notice, consent, approval or other communication required or
permitted hereunder will be in writing and will be given (i) by delivery in
person, (ii) by certified mail, return receipt requested, (iii) by commercial
overnight courier, or (iv) by facsimile transmission (telecopy) (with telephone
confirmation of receipt), as follows:
(a) If to the Shareholder, to -
Xx. Xxxx X. Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
with a copy to:
E. Xxxxxxx Xxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxxx LLP
3500 One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Buyer and/or Tridex, to -
Tridex NC, Inc. and/or
Tridex Corporation
00 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
President and Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to -
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Tel: (401) 000- 0000
Fax: (000) 000-0000
or to such other address for any of the above as may be designated by notice to
the others. Any such notice or other communication will be considered to have
been given (i) on the date of delivery in person, (ii) on the fifth day after
mailing by certified mail, provided that receipt of delivery is confirmed in
writing, (iii) on the first business day following delivery to a commercial
overnight courier, or (iv) on the day of facsimile transmission (telecopy),
provided that the giver of the notice obtains telephone confirmation of receipt.
43
XXIII. Governing Law
23.1 This Agreement and the performance thereof will be construed in
accordance with, and governed by, the laws of the State of Connecticut.
XXIV. Severability.
24.1 If any provision of this Agreement is held invalid or unenforceable
by any court of final jurisdiction, it is the intent of the parties that all
other provisions of this Agreement be construed to remain fully valid,
enforceable and binding on the parties.
XXV. Guarantee of Tridex
25.1 Tridex hereby guarantees the payment and performance by Buyer of all
of its liabilities and obligations hereunder, in accordance with and subject to
the terms and conditions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
SELLING PARTIES:
PROGRESSIVE SOFTWARE, INC.
-------------------------------
XXXX X. XXXXX
BY:
------------------------------- -------------------------------
Xxxx X. Xxxxx,
President and
Chief Executive Officer
BUYER
TRIDEX NC, INC. TRIDEX CORPORATION
By:
---------------------------- ------------------------------------
Xxxx X. Xxxxxx, Xxxx X. Xxxxxx
President President and Chief Executive Officer
44
