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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND
ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
BY AND AMONG
ADVANTIX, INC.,
BAY AREA SEATING SERVICE, INC.
AND
SHAREHOLDERS OF BAY AREA SEATING SERVICE, INC.
EFFECTIVE SEPTEMBER 18, 1997
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STOCK PURCHASE AGREEMENT
------------------------
This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as
of the 18th day of September, 1997 by and among Advantix, Inc., a Delaware
corporation ("Buyer"), Bay Area Seating Service, Inc., a California corporation
(the "Company"), and the shareholders of the Company as listed on the signature
pages of this Agreement who become parties to this Agreement (the
"Shareholders").
R E C I T A L S
---------------
A. The Shareholders own at least ninety-five percent (95%) of the
issued and outstanding shares of common stock of the Company.
B. Buyer desires to purchase all of the shares of common stock of the
Company owned by the Shareholders, and the Shareholders desire to sell such
shares, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained herein, the parties hereto agree as follows.
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. Subject to the terms and conditions set forth in
this Agreement, at the Closing, each of the Shareholders shall transfer to Buyer
that number of shares of the Company common stock which are identified below
their respective signatures on the signature page hereto, which in the aggregate
shall constitute at least ninety-five percent (95%) of the outstanding shares of
the Company common stock at the Closing, in exchange for their pro rata share of
the Purchase Price.
1.2 Purchase Price and Payment. The purchase price (the "Purchase
Price") to be paid by Buyer to the Shareholders for the Shares shall consist of
the following:
(a) (i) Cash payments at Closing (the "Closing Cash Payment")
which shall equal the product of (x) the Participating Percentage, times (y) the
sum of Ten Million Dollars ($10,000,000) plus the amount by which Closing Date
current assets exceed, or minus the amount by which Closing Date current assets
fall short of, the sum of (i) Closing Date current liabilities plus (ii)
$1,050,000. At the Closing, the Closing Date current assets and Closing Date
current liabilities will be estimated, by mutual agreement of Advantix and the
Company, based on the Company's current assets and current liabilities as of
August 31, 1997, and the amount paid at the Closing shall be based on such
estimate. Within 60 days after the Closing Date, the Company will determine the
actual Closing Date current assets and the actual Closing Date current
liabilities. If the amount by which the actual Closing Date current assets
exceeds the actual Closing Date current liabilities plus $1,050,000 is greater
than the amount estimated at the Closing, Buyer shall advise the Shareholders'
Representative of the amount of
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the excess and shall promptly pay to each Shareholder such Shareholder's
respective share of the product of (i) the Participating Percentage, times (ii)
the sum of the amount of the excess plus the amount of the Cost Allowance
Excess, if any, determined in accordance with Section 1.2(a)(ii). If the amount
by which the actual Closing Date current assets exceed the actual Closing Date
current liabilities plus $1,050,000 is less than the amount estimated at the
Closing, Buyer shall advise the Shareholders' Representative of the amount of
such difference and shall deduct an amount equal to the product of the
Participating Percentage times the amount of such difference (the "Negative
Difference") from one or both of the payments described in Sections 1.2(a)(ii)
and (iii). If the Negative Difference exceeds the total amount due the
Shareholders under the next two paragraphs, the amount of such excess shall be
deducted from the payments due under Sections 1.2(b) and (d) until paid.
(ii) Costs and expenses related to the transactions
incurred by the Company and the Shareholders, to the extent not paid prior to
the Closing, shall be paid by the Company, up to a maximum of $500,000, at or
within 60 days after the Closing. Such costs and expenses shall be approved by
the Shareholders' Representative, and shall be paid promptly after such
approval. If at the end of 60 days, such costs and expenses are less than
$500,000, the amount by which they are less than $500,000 (which amount is
subject to reduction on account of the Negative Difference) shall be the Cost
Allowance Excess. The Company shall pay the Cost Allowance Excess to the
Shareholders in accordance with Section 1.2(a)(i). The Company shall have no
obligation to pay for any such costs or expenses either in excess of $500,000 or
submitted after such 60-day period.
(iii) On the Closing Date, the Company shall segregate
$300,000 of the Company's cash in a separate general ledger account (the
"Working Capital Account") to be used only for the purposes described in this
Section 1.2(a)(iii). Between the Closing Date and the first anniversary of the
Closing Date ("Anniversary Date"), once each week on the same day each week (the
"Balance Day") the Company shall determine the amount of its Free Cash. If on
any Balance Day the amount of the Company's Free Cash is less than zero, the
Company may withdraw funds from the Working Capital Account in an amount
sufficient to increase the Company's Free Cash to zero. If at any time after
January 31, 1998 and before the Anniversary Date, Free Cash surpasses $600,000
on a Balance Day, the remaining balance in the Working Capital Account shall be
adjusted in accordance with Section 1.2(a)(iv) and, after such adjustment shall
(subject to any reduction on account of the Negative Difference) be paid ratably
to the Shareholders within thirty (30) days of such date. If the Working Capital
Balance is not repaid pursuant to the preceding sentence, then on the
Anniversary Date, the balance in the Working Capital Account shall be adjusted
in accordance with the Section 1.2(a)(iv) and, after such adjustment, shall
(subject to any reduction on account of the Negative Difference) be paid ratably
to the Shareholders within thirty (30) days of the Anniversary Date.
(iv) Prior to January 31, 1998, the Company shall
determine the amount of the royalties due [***] under Section 3 of
that certain [***] Agreement dated as of [***], as amended, for the period
from the Closing Date through December 31, 1997, and shall advise the
Shareholders' Representative of such amount. Prior to January 31, 1998, the
Company may deduct such amount from the Working Capital Account.
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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(b) Promissory notes delivered at Closing in substantially the
form attached hereto as Exhibit A (the "Notes") in the aggregate principal
amount equal to the product of Six Million Dollars ($6,000,000) times the
Participating Percentage;
(c) Warrants to purchase Buyer Common Stock delivered at
Closing in substantially the form attached hereto as Exhibit B (the "Warrants")
representing in the aggregate the right to purchase that number of shares of
Buyer Common Stock equal to the product of 3,000,000 times the Participating
Percentage;
(d) (i) A cash payment equal to the Initial Disbursement
Amount, which amount shall be paid by the Buyer to First Trust of California
(the "Disbursement Agent") under the Disbursement Agent Agreement, in
substantially the form attached hereto as Exhibit C. The Initial Disbursement
Amount will be held and disbursed in accordance with the procedures set forth in
the Disbursement Agent Agreement and this Agreement;
(ii) Each of the Shareholders hereby, jointly and
severally, unconditionally guarantees and covenants to Buyer that the Net
Revenue of the Company for the twelve consecutive calendar quarters beginning on
the first day of the first month beginning after the Closing Date (the
"Measurement Period") will equal or exceed $[***]. If Net Revenue of the Company
for the Measurement Period does not equal or exceed $[***], the Shareholders
agree that in satisfaction of their guarantee the Disbursement Agent shall pay
the Guarantee Shortfall to Buyer as provided in Section 1.2(d)(iii) below. The
Buyer agrees that its sole recourse with respect to the guaranty and covenants
set forth in this Section 1.2(d)(ii), and the breach thereof, shall be payment
of the Guarantee Shortfall at the end of the Measurement Period as provided in
Section 1.2(d)(iii), and no Shareholder shall be personally liable with respect
thereto, whether under Section 8.2 or otherwise, unless the Guarantee Shortfall
otherwise payable to the Buyer shall have been paid to anyone other than Buyer,
in which event the Shareholders shall have joint and several liability for such
amount so paid or distributed. Without limiting the generality of the preceding
sentence, no Shareholders shall have personal liability for any amount by which
Net Revenues during the Measurement Period are less than $[***], except to the
extent of the Guarantee Shortfall, nor shall any Shareholder be liable for
incidental or consequential damages if Net Revenues during the Measurement
Period are less than such amount.
(iii) Within sixty (60) days after the end of each fiscal
quarter during the Measurement Period, the Buyer shall notify the Shareholders'
Representative and the Disbursement Agent of the Net Revenues of the Company
during such quarter. If the Shareholders' Representative disputes the Buyer's
calculation and the Buyer and the Shareholders' Representative are unable to
resolve such dispute, such dispute shall be resolved by arbitration pursuant to
Section 9.5. Promptly after receipt of such notice from the Buyer, the
Disbursement Agent shall disburse to the Shareholders an amount equal to the
product of (i) Net Revenue for that fiscal quarter times (ii) the then
applicable Adjusted Payout Factor (the "Quarterly Payment"); provided, however,
that such payments shall be reduced by the dollar amount of any damages claimed
by Buyer as set forth in a Claim pursuant to Section 8.4. If the Shareholders'
Representative disputes such Claim and it is ultimately determined that Buyer is
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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not entitled to such claimed amount, the Disbursement Agent shall immediately
pay and distribute such amount to the Shareholders. If the Buyer fails to
deliver such notice and the Shareholders' Representative notifies the
Disbursement Agent and Buyer of such delinquency, then on the fifth (5th) day
after notice of the delinquency is given to Buyer, if Buyer has not cured the
delinquency, the Disbursement Agent shall pay to the Shareholders an amount
equal to one-twelfth of the Initial Disbursement Amount or the then remaining
balance of the Disbursement Account if less than one-twelfth of the Initial
Disbursement Amount remains after all disbursements pursuant to this Section,
less any Buyer Claim. The aggregate disbursements to the Shareholders under this
Section 1.2(d) shall in no event exceed the Initial Disbursement Amount plus
interest earned on the Initial Disbursement Amount, subject to reduction
pursuant to Section 8.6. After all Quarterly Payments have been made for the
Measurement Period, Buyer shall be paid the Guarantee Shortfall, along with any
other amounts held by the Disbursement Agent, to satisfy the Shareholders'
obligations set forth in Section 1.2(d)(ii) above, provided however that if at
that time any amount otherwise due the Shareholders under this Section have been
withheld pursuant to Section 8.6, and it is later determined that such amount
should be paid to the Shareholders, the Disbursement Agent shall pay such amount
to the Shareholders upon such determination.
(iv) On each Adjustment Date (as defined below), for the
purpose of calculating future quarterly disbursements to the Shareholders from
the Initial Disbursement Amount under this Section 1.2(d), the Payout Factor
shall be recalculated (the "Adjusted Payout Factor") as (x) the Adjusted
Disbursement Amount divided by (y) the product of (i) the quotient of (12 minus
the number of full quarters during the Measurement Period through that
Adjustment Date) divided by four, multiplied by (ii) $[***]. An "Adjustment
Date" shall be the first day of each quarter during the Measurement Period.
(v) The Buyer, the Company and the Shareholders
acknowledge that upon deposit with the Disbursement Agent, the Disbursement
Agent shall be deemed to hold legal title to the Initial Disbursement Amount and
the Shareholders shall be deemed to hold equitable title to their proportionate
interest in the Initial Disbursement Amount, subject to the right of the Buyer
to make claims against, and to receive disbursements from, the Initial
Disbursement Amount as provided in this Agreement. Consistent with such
equitable title, the Shareholders shall bear all taxes on income earned on the
amounts held by the Disbursement Agent. If for any reason a court of competent
jurisdiction should hold that, notwithstanding the intention of the parties set
forth in the preceding sentence, the Buyer is the owner of the Initial
Disbursement Amount, then the Buyer hereby grants to the Shareholders'
Representative, on behalf of the Shareholders, a first priority security
interest in the Initial Disbursement Amount, and the Shareholders'
Representative shall have all of the rights and remedies of a secured party
under the Uniform Commercial Code with respect thereto. Such security interest
shall terminate automatically and without further action by the Shareholders'
Representative with respect to any and all amounts paid or due to the Buyer from
the Initial Disbursement Amount pursuant to Section 1.2(d)(iii) or Section 8.6
of this Agreement. At the Closing, the Buyer shall execute a Uniform Commercial
Code financing statement relating to the Initial Disbursement Amount, which the
Shareholders' Representative may file as a protective measure and shall not be
deemed
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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by a court to constitute evidence that the parties intended to create a
security interest rather than to vest equitable ownership of the Initial
Disbursement Amount in the Shareholders.
(vi) No later than January 31 of each year, the
Disbursement Agent shall distribute to the Shareholders on a pro rata basis an
amount equal to forty percent (40%) of the income earned on amounts held by the
Disbursement Agent for the prior year. In addition, within thirty (30) days
after the end of the Measurement Period, Disbursement Agent shall distribute to
the Shareholders on a pro rata basis an amount equal to (I) the product of (x)
income earned on amounts held by the Disbursement Agent for the Measurement
Period (the "Measurement Period Income") times, (y) net revenue for the
Measurement Period divided by $[***], less (II) any amounts previously
distributed to the Shareholders pursuant to the preceding sentence; provided,
however, in no event shall such distribution to the Shareholders exceed
Measurement Period Income less any amounts previously distributed to the
Shareholders pursuant to the preceding sentence.
(e) Incentive Payments pursuant to Section 1.3.
The final Purchase Price determined pursuant to this Section 1.2 shall be
allocated pro rata among the Shareholders in proportion to the number of shares
owned, subject to Section 9.11 hereof.
1.3 Incentive Payment. If at the end of any fiscal quarter during the
Measurement Period, the Company's actual cumulative Net Revenue to date during
the Measurement Period exceeds $[***], Buyer shall pay to the Shareholders
(i) with respect to the fiscal quarter during which such event occurs, an amount
equal to such excess multiplied by 1/2 times the Payout Factor, and (ii) with
respect to each fiscal quarter thereafter during the Measurement Period, an
amount equal to the Net Revenue of the Company for that period multiplied by 1/2
times the Payout Factor. Amounts payable under this Section 1.3 shall be made
within sixty (60) days of the end of the quarter for which an Incentive Payment
is earned.
1.4 Shared Transition Costs.
(a) Buyer and the Shareholders agree to share, on an equal
basis, both (i) all costs and expenses incurred by the Company or Buyer in
connection with the one-time software conversion of the Company, its clients,
and its retail outlets to Buyer's software, and (ii) all Extraordinary (as
defined below) rebates and costs that the Company or Buyer become obligated to
pay within eighteen (18) months after the Closing in connection with the renewal
or extension of any contract existing as of the Closing, or execution of a new
contract, with a Significant Client of the Company (collectively, (i) and (ii)
are the "Transition Costs"); provided that the Shareholders in the aggregate
would not be obligated to pay more than a total of [***] Dollars ($[***]) of the
Transition Costs, and any Transition Costs in excess of [***] Dollars ($[***])
would be borne exclusively by Buyer; and provided further, the Shareholders'
portion of the Transition Costs shall be funded out of the Transition Costs
Account described in Section 1.4(b). Notwithstanding the foregoing, "Transition
Costs" shall not include any amounts subject to indemnification under Section
8.2. For purposes of this Section 1.4, a rebate or cost
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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shall be deemed "Extraordinary" if it is either (a) paid in connection with
obtaining a Significant Client's consent to the transactions contemplated by
this Agreement, or (b) otherwise incurred to maintain a Significant Client as a
client of the Company during the 18-month period and is of a type or amount that
it is different or unusual compared to the Company's historical practices with
respect to that client. Any dispute between the parties as to whether a rebate
or cost is Extraordinary which cannot be resolved within thirty (30) days shall
be submitted to binding arbitration before Xxxxxxx Xxxx, or a successor mutually
agreed to by the parties.
(b) At the Closing, the Company shall put [***] Dollars
($[***]) into a separate account in its name (the "Transition Costs Account") to
fund the Shareholders' portion of the Transition Costs. Any disbursement from
the Transition Costs Account shall require a signature from the Company and the
Shareholders' Representative. The Company or Buyer shall notify the
Shareholders' Representative of any Transition Costs that it pays (in the case
of Transition Costs described in Section 1.4(a)(i)) or documents (in the case of
Transition Costs described in Section 1.4(a)(ii)). The Shareholders'
Representative shall within five (5) business days of receipt of such
notification either (i) authorize the disbursement from the Transition Costs
Account to fund the Shareholders' fifty percent (50%) portion of such Transition
Costs or (ii) submit such calculation of Transition Costs to binding arbitration
pursuant to Section 1.4(a). If any amount remains in the Transition Costs
Account after eighteen (18) months after the Closing Date, and no dispute exists
regarding any Transition Costs, such amount shall be delivered to the
Shareholders' Representative to be distributed ratably to the Shareholders.
1.5 Special Indemnification Account. At the Closing, the Company shall
put [***] Dollars ($[***]) into a separate account in the name of the
Shareholders' Representative (the "Special Indemnification Account"). Any
disbursement from this Special Indemnification Account shall require a signature
from the Shareholders' Representative and Buyer. The funds in this account shall
be used to pay any indemnification Claims of Buyer under Section 8.2(ii). Buyer
shall notify Shareholders' Representative of any such Claim pursuant to Section
8.4 and such Claim shall be handled in accordance with Section 8.4. Upon any
determination in accordance with that Section that a Claim has been accepted,
the amount of such Claim shall be disbursed from the Special Indemnification
Account to Buyer or its designee. If any amount remains in the Special
Indemnification Account on April 1, 1999, or such earlier date as Buyer and
Shareholders' Representative shall agree, and if no dispute exists regarding any
Claim under Section 8.2(ii) at that time, such amount shall be delivered to the
Shareholders' Representative to be distributed ratably to the Shareholders.
1.6 Closing. The closing of the transactions contemplated by this
Agreement ("Closing") shall take place in the offices of Xxxxxx & XxXxxxx LLP,
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx, at 10:00 a.m. on
September __, 1997, or at such other time and date as the parties may fix
("Closing Date").
1.7 Closing Obligations. At the Closing:
(a) The Company and the Shareholders will deliver to Buyer:
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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(i) certificates representing the Shares being sold by
them under this Agreement, duly endorsed (or accompanied by duly executed stock
powers), along with satisfactory evidence of authority to execute this Agreement
and transfer the Shares (in the case of non-individual Shareholders, for
transfer to Buyer;
(ii) a certificate of the President of the Company
pursuant to Section 6.1(a);
(iii) a general release, in form and substance
satisfactory to Buyer, from each officer and director of the Company releasing
the Company from all obligations under any indemnification agreements, the
charter documents of the Company, or otherwise, arising out of or relating to
this Agreement or the consummation of the transactions contemplated thereby,
other than obligations arising after the Closing Date under this Agreement and
the other agreements described in this Section to which the Company is a party,
provided that such release shall not release any rights that any such officer or
director may have against any insurance carrier;
(iv) an employment agreement in substantially the form of
Exhibit D, executed by Xxxx Xxxxxxxx and the Company;
(v) a consulting agreement in substantially the form of
Exhibit E, executed by Xxxxx Xxxxxxxxxx and the Company;
(vi) noncompetition agreements in substantially the form
of Exhibit F, executed by the Company and each of Xxxxxx Xxxxxxx, Xxxxxx Xxxxx
and Xxxxx Xxxxxxxxxx;
(vii) a security agreement in substantially the form of
Exhibit G (the "Security Agreement"), executed by the Shareholders'
Representative;
(viii) a noncompetition agreement in substantially the
form of Exhibit H, executed by the Company and Xxxx Xxxxxxxx;
(ix) an opinion of Shartsis, Xxxxxx & Xxxxxxxx LLP, dated
the Closing Date, substantially in the form of Exhibit I;
(x) a subordination agreement in substantially the form of
Exhibit K executed by each of the Shareholders; and
(xi) an amended investor right agreement, dated the
Closing Date (the "Rights Agreement"), substantially in the form of Exhibit M.
(b) Buyer will deliver to the Shareholders' Representative on
behalf of the Shareholders:
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(i) a bank cashier's or certified check for each
Shareholder equal to their pro rata amount of the Closing Cash Payment;
(ii) a Note for each Shareholder equal to their pro rata
amount of the Notes;
(iii) a Warrant for each Shareholder equal to their pro
rata share of the right to purchase Common Stock;
(iv) a certificate of the President of Buyer pursuant to
Section 6.2(a);
(v) an opinion of Xxxxxx & XxXxxxx LLP, dated the Closing
Date, substantially in the form of Exhibit J; and
(vi) a security agreement in substantially the form of
Exhibit G, executed by Buyer and the Company.
(c) Buyer, the Shareholders and the Disbursement Agent shall
enter into the Disbursement Agent Agreement and Buyer shall deposit the Initial
Disbursement Amount with the Disbursement Agent by bank cashier's or certified
check.
(d) The Company and Xxxx Xxxxxxxx shall enter into a
disbursement agreement in substantially the form of Exhibit L and the Company
shall deposit Six Hundred Thousand Dollars ($600,000) with the Disbursement
Agent by bank cashier's or certified check.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the attached Schedule II (which lists exceptions
to the following representations and warranties and also contains matters
required to be disclosed pursuant to this Article II, each of which corresponds
to the numbered sections contained in this Article II), Buyer represents and
warrants to the Company and the Shareholders as follows:
2.1 Organization; Qualification. Buyer (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of Delaware; (b) has the corporate power and authority to carry on its business
as now conducted; (c) has no subsidiaries or affiliates and owns no securities
or other interests in any other corporation or other entity (except for Buyer's
ownership of all of the outstanding equity securities of each Buyer Subsidiary
as disclosed in Schedule 2.3); (d) has delivered to the Company complete and
correct copies of its certificate of incorporation and by-laws as currently in
effect; and (e) is qualified to do business and is in good standing in the State
of California and in each other jurisdiction in which the property owned, leased
or operated by it or the business conducted by it makes such qualification
necessary.
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2.2 Capital Stock of Buyer. The authorized capital stock of Buyer
consists of 100,000,000 shares of common stock, 8,440,002 shares of Series A
Preferred Stock, and 6,000,000 shares of Series B Preferred Stock, of which
14,095,640 shares of Common Stock, 8,440,002 shares of Series A Preferred Stock
and 2,094,174 shares of Series B Preferred Stock are issued and outstanding.
There are no (a) preemptive or other subscriptive rights with respect to the
outstanding shares of Buyer common stock, (b) treasury shares or any other
authorized or outstanding equity securities of Buyer, or (c) outstanding rights,
options, warrants, contracts, understandings, arrangements or commitments
providing for issuance of, or granting of rights to acquire, any capital stock
of Buyer or securities convertible into or exchangeable for capital stock of
Buyer.
2.3 Capital Stock of Buyer Subsidiaries. Section 2.3 of the Schedule
lists all subsidiaries, direct or indirect, of Buyer (hereinafter collectively
the "Buyer Subsidiaries" or individually a "Buyer Subsidiary"). Such Schedule
correctly sets forth, as to each of the Buyer Subsidiaries, (a) the jurisdiction
of incorporation; (b) the jurisdictions, if any, in which such Buyer Subsidiary
is qualified to do business as a foreign corporation; (c) the number of shares
of each Buyer Subsidiary's authorized capital; (d) the number of shares thereof
issued and outstanding; and (e) the names of the holders of such outstanding
shares and the amounts they own. Neither Buyer nor any Buyer Subsidiary has any
outstanding investment in or advance of cash or is otherwise under any
obligation to purchase or subscribe to any investments in, or incur obligations
with respect to, any corporation, limited liability company, partnership or
other entity other than Buyer or the Buyer Subsidiaries. There are no
outstanding rights or options to acquire, or any outstanding securities
convertible into, stock of any class of any Buyer Subsidiary. Each Buyer
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where such qualification is necessary to the transaction of
its business, all of which jurisdictions are listed on Section 2.3 of the
Schedule hereto, and has corporate power to own all of its property and assets
and carry on its business as it is now being conducted.
2.4 Authority. Buyer has full corporate power and authority to execute
and deliver this Agreement, and to perform Buyer's obligations under, and to
consummate the transactions contemplated by, this Agreement, and all corporate
action of Buyer necessary for such execution, delivery and performance has been
duly and validly taken as required by law or under the Certificate of
Incorporation or Bylaws of Buyer. This Agreement constitutes the legal, valid
and binding obligation of Buyer enforceable in accordance with its terms against
Buyer subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally and to general equitable principles. The execution and delivery
of this Agreement by Buyer do not, and the performance and consummation by Buyer
of the transactions contemplated by this Agreement will not (a) conflict with,
constitute or result in a breach or violation of, or default under, any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
lease, license, agreement, contract or other instrument or obligation to which
Buyer or any Buyer Subsidiary is a party or by which any of their respective
assets or properties is bound; (b) violate any judgment, order, injunction,
decree, statute, rule, or regulation applicable to Buyer or any Buyer Subsidiary
or any of their respective assets or properties; (c) contravene, violate or be
impermissible under the Certificate of Incorporation or Bylaws of Buyer or any
Buyer
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Subsidiary; or (d) permit any party to terminate any lease, contract, agreement
or other instrument to which Buyer or any Buyer Subsidiary is a party or to
accelerate the maturity of any indebtedness or other obligation of Buyer or any
Buyer Subsidiary. Except as set forth in Section 2.4 of the Schedule, Buyer is
not and will not be required to give any notice to or obtain any consent from
any Person in connection with the execution and delivery of this Agreement and
the consummation by Buyer of the transaction contemplated by this Agreement.
2.5 Compliance With Law. Buyer and each Buyer Subsidiary holds all
licenses, franchises, permits and authorizations necessary for the lawful
conduct of its business and has complied and is currently in compliance, in all
material respects, with all applicable statutes, laws, ordinances, rules and
regulations of all federal, state, local and foreign governmental bodies,
agencies and subdivisions having, asserting or claiming jurisdiction over it or
over any part of its operations.
2.6 No Governmental Consents. Except as contemplated by this
Agreement, neither the execution of this Agreement, nor the consummation of the
transactions contemplated hereby, require the consent or approval of, or
declaration, filing or registration with, any governmental authority.
2.7 Properties. Attached as Section 2.7 of the Schedule is a summary
schedule of all real estate interests and leaseholds, equipment, machinery,
vehicles, improvements and other tangible properties or assets owned or leased
by Buyer or the Buyer Subsidiaries or otherwise used in, or required for, the
business of Buyer or the Buyer Subsidiaries. Each of Buyer and the Buyer
Subsidiaries owns (beneficially and of record) and has good and marketable title
to all of its properties and assets, and none of such properties or assets is
subject to any mortgage, pledge, lien, security interest, lease, charge,
encumbrance or joint ownership other than equipment leases entered into in the
ordinary course of business. All such properties and assets and their use
conform in all material respects to all applicable building, zoning, fire,
health and other laws, ordinances or regulations and no notice of any violation
with respect thereto has been received by either Buyer or Buyer Subsidiary. All
such properties and assets are in good condition (except for normal wear and
tear), fit for the purposes for which they are being used. Each of Buyer and the
Buyer Subsidiaries has valid and enforceable leasehold interests in all
properties and assets which it purports to lease. Buyer or one or more of the
Buyer Subsidiaries is, or shall be prior to the Closing, the party-lessee on all
real and personal property leases covering all or any portion of the premises or
any personal property used by Buyer or any Buyer Subsidiary in the operation of
its business. All leases to which Buyer or any Buyer Subsidiary is a
party-lessee are in full force and effect and neither Buyer nor any Buyer
Subsidiary, nor, to the knowledge of Buyer, the other party thereto, is in
default thereunder, and the transactions contemplated by this Agreement shall
not affect their validity or enforceability.
2.8 Financial Information. Buyer has delivered to the Company true
copies of the consolidated financial statements of Buyer for the fiscal year
ended December 31, 1996, with any interim consolidated financial statements
through June 30, 1997. Such consolidated financial statements of Buyer shall
hereinafter be referred to collectively as the "Buyer Financial Information."
The Buyer Financial Information (a) is complete and correct in all material
respects, (b) has been prepared in conformity with generally accepted accounting
principles
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consistently applied, and (c) presents fairly the consolidated financial
condition of Buyer at the dates presented and the consolidated results of
operations of Buyer for the period covered subject to year end adjustments for
any interim financial statements. There does not exist any fact, event,
condition, claim or latent claim, known to Buyer, which would cause an adverse
change in the Buyer Financial Information as presented other than as set forth
therein.
2.9 Absence of Change. Since June 30, 1997, there has been no adverse
change in the financial condition, results of operations, assets, liabilities or
business of Buyer and the Buyer Subsidiaries, taken as a whole, and no event or
condition has occurred which Buyer believes has adversely affected or shall
adversely affect the financial condition, results of operations, assets,
liabilities or business of Buyer and the Buyer Subsidiaries, taken as a whole.
2.10 Taxes. Buyer and each Buyer Subsidiary have prepared and filed
all federal, state and local tax returns and tax reports required to be filed to
date with appropriate governmental agencies in all jurisdictions in which such
returns and reports are required to be filed. All taxes and estimated taxes
(including any penalties or interest) imposed by or payable to any governmental
taxing authority with respect to the operations or ownership of property and
assets of Buyer or any Buyer Subsidiary have been fully paid or adequately
provided for in the Buyer Financial Information, except taxes based on
operations since that date. All tax returns and reports to date are true and
correct.
2.11 Licenses, Permits, Etc. Each of Buyer and the Buyer Subsidiaries
has all approvals, authorizations, consents, licenses, orders, franchises,
rights, governmental security clearances and registrations and permits of all
governmental agencies, whether federal state or local, United States or foreign,
required to permit the operation of its businesses as presently conducted, the
absence of which would have an adverse effect on the financial condition, assets
or business of Buyer and the Buyer Subsidiaries, taken as a whole.
2.12 Contracts and Commitments. Neither Buyer nor any Buyer Subsidiary
is a party to any: (i) agreement or indenture relating to the borrowing of money
or to mortgaging, pledging or otherwise placing a lien on any of the assets of
Buyer or any Buyer Subsidiary; or (ii) guaranty of any obligation for borrowed
money or otherwise, other than endorsements made for collection.
2.13 No Default. Buyer and each Buyer Subsidiary is not in violation,
breach or default, and no event exists that, with notice or lapse of time or
both, would constitute such a violation, breach or default under any loan
agreement, indenture, bond, resolution, agreement, lease, contract or other
instrument to which Buyer or any Buyer Subsidiary is a party or to which Buyer
or any Buyer Subsidiary or its properties and assets are bound.
2.14 Litigation. There is no governmental or private litigation,
investigation, arbitration or proceeding of any kind whatsoever pending or, to
the knowledge of Buyer, threatened against Buyer or any Buyer Subsidiary.
Neither Buyer nor any Buyer Subsidiary is aware of any facts which might
reasonably result in matters described in this Section.
2.15 No Undisclosed Liabilities. Except as and to the extent
specifically reflected or reserved against in the Buyer Financial Information or
otherwise disclosed herein,
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neither Buyer nor any Buyer Subsidiary has any liabilities or obligations of any
nature, whether absolute, accrued or contingent, and whether due or to become
due (including, without limitation, any liability for taxes and interest,
penalties and other charges payable with respect to any such liability or
obligation) which in the aggregate are material to the financial condition,
assets, properties or business of Buyer and the Buyer Subsidiaries, taken as a
whole.
2.16 No Broker or Finder. Neither Buyer nor any Buyer Subsidiary has
had discussions with, negotiated with, been represented by or employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees to any individual or entity in connection with this Agreement
or any of the transactions contemplated hereby.
2.17 No Adverse Developments. Neither Buyer nor any Buyer Subsidiary
has knowledge of any development of any kind in any applicable federal or state
law, regulation or ordinance relating to the business of Buyer or any Buyer
Subsidiary which would have an adverse effect upon the financial condition,
assets or business of Buyer or any Buyer Subsidiary.
2.18 Conversion Shares. Any shares of common stock of Buyer issued
upon conversion of the Notes will be duly and validly issued, fully paid and
nonassessable.
2.19 Disclosure. The information relating to and concerning Buyer and
each Buyer Subsidiary contained in this Agreement, any Schedule hereto or in any
other certificate, instrument or other document given by Buyer in connection
with this Agreement (including each representation and warranty contained herein
or therein, or in the Joint Information Statement to be provided to the
Shareholders of the Company and the stockholders of Buyer (the "Joint
Information Statement")) is true, correct and complete and contains no untrue
statement of material fact or omits or will omit to state material facts
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE SHAREHOLDERS
Except as set forth in the attached Schedule III (which lists
exceptions to the following representations and warranties and also contains
matters required to be disclosed pursuant to this Article III, each of which
corresponds to the numbered sections contained in this Article III), the Company
and each of the Shareholders jointly and severally represent and warrant to
Buyer as follows:
3.1 Organization; Qualification. The Company (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
state of California; (b) has the corporate power and authority to carry on its
business as now conducted; (c) has no subsidiaries or affiliates and owns no
securities or other interests in any other corporation or other entity (except
for the Company's direct or indirect ownership of all the outstanding equity
securities of the Company Subsidiaries as disclosed in Section 3.3 of the
Schedule); (d) has delivered to Buyer complete and correct copies of its
articles of incorporation and bylaws as
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currently in effect; and (e) is qualified to do business and is in good standing
in the state of California and in each other jurisdiction in which the property
owned, leased or operated by it or the business conducted by it makes such
qualification necessary.
3.2 Capital Stock. The authorized capital stock of the Company
consists of 500,000 shares of common stock, of which 221,083 shares
(collectively, the "Company Shares") are issued and outstanding. All of the
Company Shares have been duly authorized and validly issued and are fully paid
and non-assessable, and were sold pursuant to, and within the limitations
contained in, appropriate and effective permits, qualifications or consents of
all applicable government authorities to the extent required. There are no (a)
preemptive or other subscriptive rights with respect to any of the Company
Shares, (b) treasury shares or any other authorized or outstanding equity
securities of the Company or (c) outstanding rights, options, warrants,
contracts, understandings, arrangements or commitments providing for issuance
of, or granting of rights to acquire, any capital stock of the Company or
securities convertible into or exchangeable for capital stock of the Company.
3.3 Subsidiaries. Section 3.3 of the Schedule lists all subsidiaries,
direct or indirect, of the Company (hereinafter collectively the "Company
Subsidiaries" or individually a "Company Subsidiary"). Such Schedule correctly
sets forth, as to each of the Company Subsidiaries, (a) the jurisdiction of
incorporation; (b) the jurisdictions, if any, in which such Company Subsidiary
is qualified to do business as a foreign corporation; (c) the number of shares
of each Company Subsidiary's authorized capital; (d) the number of shares
thereof issued and outstanding; and (e) the names of the holders of such
outstanding shares and the amounts they own. Neither the Company, nor any
Company Subsidiary, has any outstanding investment in or advance of cash or is
otherwise under any obligation to purchase or subscribe to any investments in,
or incur obligations with respect to, any corporation, limited liability
company, partnership or other entity other than the Company or the Company
Subsidiaries. There are no outstanding rights or options to acquire, or any
outstanding securities convertible into, stock of any class of any Company
Subsidiary. Each Company Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where such qualification is necessary to
the transaction of its business, all of which jurisdictions are listed on
Section 3.3 of the Schedule hereto, and has corporate power to own all of its
property and assets and carry on its business as it is now being conducted.
3.4 Authority. The Company has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement, and all corporate
action of the Company necessary for such execution, delivery and performance has
been duly and validly taken as required by law or under the Articles of
Incorporation or Bylaws of the Company. This Agreement constitutes the legal,
valid and binding obligation of the Company enforceable in accordance with its
terms against the Company subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles. The execution
and delivery of this Agreement by the Company do not, and the performance and
consummation by the Company of the transactions contemplated by this Agreement
will not (a) conflict with, constitute or result in a breach or violation of, or
default under, any of the terms, conditions or provisions of any material note,
bond, mortgage,
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indenture, lease, license, agreement, contract or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which any of
their respective assets or properties is bound; (b) violate any judgment, order,
injunction, decree, statute, rule, or regulation applicable to the Company or
any Company Subsidiary or any of their respective assets or properties; (c)
contravene, violate or be impermissible under the Articles of Incorporation or
Bylaws of the Company or any Company Subsidiary; or (d) permit any party to
terminate any lease, contract, agreement or other instrument to which the
Company or any Company Subsidiary is a party or to accelerate the maturity of
any indebtedness or other obligation of the Company or any Company Subsidiary.
Except as set forth in Section 3.4 of the Schedule, the Company is not and will
not be required to give any notice to or obtain any consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement.
3.5 Compliance With Law. The Company and each Company Subsidiary hold
all licenses, franchises, permits and authorizations necessary for the lawful
conduct of its business and has complied and is currently in compliance, in all
material respects, with all applicable statutes, laws, ordinances, rules and
regulations of all federal, state, local and foreign governmental bodies,
agencies and subdivisions having, asserting or claiming jurisdiction over it or
over any part of its operations.
3.6 No Governmental Consents. Except as contemplated by this
Agreement, neither the execution of this Agreement, nor the consummation of the
transactions contemplated hereby, require the consent or approval of, or
declaration, filing or registration with any governmental authority.
3.7 Properties. Attached as Section 3.7 of the Schedule is a summary
schedule of all real estate interests and leaseholds, equipment, machinery,
vehicles, improvements and other tangible properties or assets owned or leased
by the Company or the Company Subsidiaries or otherwise used in, or required
for, the business of the Company or the Company Subsidiaries. The Company and
each Company Subsidiary own (beneficially and of record) and has good and
marketable title to all of its properties and assets, and none of such
properties or assets is subject to any mortgage, pledge, lien, security
interest, lease, charge, encumbrance or joint ownership other than equipment
leases entered into in the ordinary course of business, the principal terms of
which are summarized on Section 3.7 of the Schedule. All such properties and
assets and their use conform in all material respects to all applicable
building, zoning, fire, health and other laws, ordinances or regulations and no
notice of any violation with respect thereto has been received by any of the
Company or the Company Subsidiaries. All such properties and assets are in good
condition (except for normal wear and tear), fit for the purposes for which they
are being used. Each of the Company and the Company Subsidiaries has valid and
enforceable leasehold interests in all such properties and assets which it
purports to lease. The Company or one or more of the Company Subsidiaries is, or
shall be prior to the Closing, the party-lessee on all real and personal
property leases covering all or any portion of the premises or any personal
property used by the Company or any Company Subsidiary in the operation of its
business. All leases to which the Company or any Company Subsidiary is a
party-lessee are in full force and effect and neither the Company nor any
Company Subsidiary nor, to the knowledge of the Company and the Shareholders,
the other party thereto, is in default
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thereunder, and the transactions contemplated by this Agreement shall not affect
their validity or enforceability.
3.8 Financial Information. The Company has delivered to Buyer true
copies of the consolidated financial statements of the Company for the fiscal
year ended March 31, 1997, with any interim consolidated financial statements
through August 31, 1997. Such consolidated financial statements of the Company
shall hereinafter be referred to collectively as the "Company Financial
Information". The Company Financial Information (a) is complete and correct in
all material respects, (b) has been prepared in conformity with generally
accepted accounting principles consistently applied, and (c) presents fairly the
consolidated financial condition of the Company at the dates presented and the
consolidated results of operations of the Company for the period covered subject
to year end adjustments for any interim financial statements. There does not
exist any fact, event, condition, claim or latent claim, known to the Company
which would cause an adverse change in the Company Financial Information as
presented other than as set forth therein.
3.9 Absence of Change. Since August 31, 1997:
(a) There has been no adverse change in the financial
condition, results of operations, assets, liabilities or business of the Company
and the Company Subsidiaries, taken as a whole, and no event or condition has
occurred which the Company believes has adversely effected or shall adversely
effect the financial condition, results of operations, assets, liabilities or
business of the Company and the Company Subsidiaries, taken as a whole;
(b) There have been no short term or long term liabilities or
obligations incurred by or on behalf of the Company or any Company Subsidiary,
except in the normal course of business, and no such liability in the ordinary
course exceeds $10,000 in any one instance or $25,000 in the aggregate;
(c) There have been no dividends, redemptions, share dividends
or other distributions in respect of shares to the shareholders of the Company
or any Company Subsidiary declared, set aside or paid;
(d) There has been no sale, transfer or distribution of any
asset of the Company or any Company Subsidiary or any other transaction with
respect to the Company or any Company Subsidiary entered into other than in the
regular and customary course of business, and there has been no forgiveness,
waiver or compromise of debt;
(e) There has been no loss, damage, or destruction of property
or assets of the Company or any Company Subsidiary not fully covered by
insurance and no waiver of any rights of material value;
(f) No capital expenditure with respect to the Company or any
Company Subsidiary or any of the properties or assets of any of them has been
made in excess of $10,000 in the aggregate;
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(g) There has been no change in the employment contract or
pension plan of any officer, director, employee or consultant of the Company or
any Company Subsidiary, and no such person has received any bonus or option to
purchase any equity security of the Company or any Company Subsidiary; and
(h) Since August 31, 1997, the Company has not reclassified or
otherwise caused an increase in its current assets or decrease in its current
liabilities, other than in the normal course of the Company's business as
conducted over the prior three months, and in no event will the Company increase
any long-term indebtedness resulting in either an increase in current assets or
decrease in current liabilities or sell or otherwise dispose of its non-current
assets.
3.10 Taxes. The Company and each Company Subsidiary have prepared and
filed all federal, state and local tax returns and tax reports required to be
filed to date with appropriate governmental agencies in all jurisdictions in
which such returns and reports are required to be filed. All taxes and estimated
taxes (including any penalties or interest) imposed by or payable to any
governmental taxing authority with respect to the operations or ownership of
property and assets of the Company or any Company Subsidiary have been fully
paid or adequately provided for in the Company Financial Information, except
taxes based on operations since that date. All tax returns and reports to date
are true and correct.
3.11 Licenses, Permits, Etc. The Company and each of the Company
Subsidiaries have all approvals, authorizations, consents, licenses, orders,
franchises, rights, governmental security clearances and registrations and
permits of all governmental agencies, whether federal, state or local, United
States or foreign, required to permit the operation of its businesses as
presently conducted, the absence of which would have an adverse effect on the
financial condition, assets or business of the Company and the Company
Subsidiaries, taken as a whole.
3.12 Intellectual Property. Section 3.12 of the Schedule is a list of
all names, trade names, patents, trademarks, franchises and copyrights used by
the Company and the Company Subsidiaries; and, except as set forth in Section
3.12 of the Schedule, the Company or a Company Subsidiary owns, and has the
legal right to use, such names, trade names, patents, trademarks, franchises and
copyrights. Nothing has come to the attention of the Company or any Shareholder
to the effect that any such use may infringe on any rights owned, held, or
asserted by any other person or that any such rights are not valid and
enforceable.
3.13 Contracts and Commitments.
(a) Neither the Company nor any Company Subsidiary is a party
to any: (i) agreement or indenture relating to the borrowing of money or to
mortgaging, pledging or otherwise placing a lien on any of the assets of the
Company or any Company Subsidiary; (ii) guaranty of any obligation for borrowed
money or otherwise, other than endorsements made for collection; (iii) contract
or group of related contracts with the same party for the purchase of products
or services, under which the undelivered balance of such products and services
has a selling price in excess of $10,000 in the aggregate; (iv) contract or
group of related contracts with the same party for the sale of products or
services under which the undelivered balance of
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such products or services has a sales price in excess of $10,000 in the
aggregate; (v) other contract or group of related contracts with the same party
continuing over a period of more than six months from the date or dates thereof,
not terminable by it on 30 days or less notice without penalty, or involving
more than $10,000 in the aggregate; (vi) contract which prohibits the Company or
any Company Subsidiary from freely engaging in business anywhere in the world;
(vii) contract, agreement or understanding with any shareholder, officer,
director or employee of the Company or any Company Subsidiary (other than for
employment on customary terms); (viii) any joint venture or partnership contract
or arrangement or any other agreement involving the sharing of profits or
expenses; or (ix) other agreement material to the business of the Company or any
Company Subsidiary or other agreement not entered into in the ordinary course of
business.
(b) Buyer has been supplied with a true and correct copy of
all written contracts which are referred to on Section 3.13 of the Schedule,
together with all amendments, waivers or other changes thereto.
3.14 No Default. The Company and each Company Subsidiary are not in
violation, breach or default, and no event exists that, with notice or lapse of
time or both, would constitute such a violation, breach or default under any
loan agreement, indenture, bond, resolution, agreement, lease, contract or other
instrument to which the Company or any Company Subsidiary is a party or to which
the Company or any Company Subsidiary or its properties and assets are bound.
3.15 Insurance. Section 3.15 of the Schedule attached hereto lists
and briefly describes each insurance policy maintained by the Company or the
Company Subsidiaries with respect to their properties, assets or business
operations. All of such insurance policies are in full force and effect, and
neither the Company nor any Company Subsidiary is in default with respect to its
obligations under any of such insurance policies.
3.16 Bank Accounts. Section 3.16 of the Schedule attached hereto
contains a list of each bank account, including safe deposit boxes, maintained
by the Company or any Company Subsidiary and the names of the persons authorized
to draw upon or have access thereto.
3.17 Litigation. There is no governmental or private litigation,
investigation, arbitration or proceeding of any kind whatsoever pending or, to
the knowledge of the Company, threatened against the Company or any Company
Subsidiary, other than proceedings with no more than $10,000 in dispute which do
not aggregate more than $50,000 in dispute. Neither the Company nor any
Shareholder is aware of any facts which might reasonably result in matters
described in this Section.
3.18 No Undisclosed Liabilities. Except as and to the extent
specifically reflected or reserved against in the Company Financial Information
or otherwise disclosed herein, neither the Company nor any Company Subsidiary
has any liabilities or obligations of any nature, whether absolute, accrued or
contingent, and whether due or to become due (including, without limitation, any
liability for taxes and interest, penalties and other charges payable with
respect to any such liability or obligation) which in the aggregate are material
to
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the financial condition, assets, properties or business of the Company and the
Company Subsidiaries, taken as a whole.
3.19 Labor Contracts and Employment Agreements. Section 3.19 of the
Schedule identifies (i) each collective bargaining agreement and other labor
agreement to which the Company or any Company Subsidiary is a party or by which
it is bound; (ii) each employment, profit sharing, deferred compensation, bonus,
stock option, stock purchase, pension, retainer, consulting, retirement, health,
welfare, commissions, or incentive plan or contract to which the Company or any
Company Subsidiary is a party, or by which it is or may be bound; and (iii) each
plan and agreement under which "fringe benefits" (including, but not limited to,
vacation plans or programs, sick leave plans or programs, dental or medical
plans or programs, insurance, hospitalization, and related or similar benefits)
are afforded to employees of the Company or any Company Subsidiary. All these
contracts, agreements and arrangements are in full force and effect. The Company
and each Company Subsidiary are not and, to the best knowledge of the Company or
the Shareholders, no other party to any such agreement, plan, program or
contract is, in default with respect to any material term or condition thereof,
nor has any event occurred which through the passage of time or the giving of
notice, or both, would constitute a default thereunder or would cause the
acceleration of any obligation of any party thereto. The Company and each
Company Subsidiary have complied in all material respects with all applicable
laws, rules and regulations relating to the employment of labor, including those
relating to wages, hours, collective bargaining and the payment and withholding
of taxes and other sums as required by appropriate governmental authorities.
Except as set forth in Section 3.19 of the Schedule:
(a) No unfair labor practice complaint is pending against the
Company or any Company Subsidiary before the National Labor Relations Board or
any state or local agency, no labor strike or other labor trouble affecting the
Company or any Company Subsidiary is pending, and no labor related grievance is
pending against the Company or any Company Subsidiary;
(b) No organization or representation question is pending
respecting the employees of the Company or any Company Subsidiary, and no such
question has been raised within the three (3) year period prior to the date of
this Agreement; and
(c) No arbitration proceeding arising out of or under any
collective bargaining agreement to which the Company or any Company Subsidiary
is a party is pending, and to the best knowledge of the Company and the
Shareholders no basis for any such proceeding exists.
3.20 Corporate Records. The corporate minute book and stock records
of the Company and each Company Subsidiary, presented to Buyer and its counsel
for review, are complete and accurate. The meetings of directors and
shareholders referred to therein were duly called and held and signatures
contained on all documents therein are the true signatures of the persons
purporting to have signed them.
3.21 No Adverse Developments. Except as disclosed on Section 3.21 of
the Schedule, neither the Company nor any Company Subsidiary has knowledge of
any development
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of any kind in any applicable federal or state law, regulation or ordinance
relating to the business of the Company or any Company Subsidiary which would
have an adverse effect upon the financial condition, assets or business of the
Company or any Company Subsidiary.
3.22 No Broker or Finder. Neither the Company nor any Company
Subsidiary has had discussions with, negotiated with, been represented by or
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees to any individual or entity in connection with this
Agreement or any of the transactions contemplated hereby.
3.23 Environmental Matters. Neither the Company nor any Company
Subsidiary is in violation of any environmental law or regulation, the
correction of or compliance with which will or could entail expenditures in
excess of $5,000 per occurrence, or $10,000 in the aggregate, or otherwise
adversely affect business operations as previously conducted.
3.24 Agreements in Full Force and Effect. With respect to the Company
and, to the knowledge of the Company and the Shareholders, the other parties
thereto, all contracts, leases, policies and licenses referred to in this
Article III, and the Schedules hereto, are valid and in full force and effect.
3.25 Disclosure. The information relating to and concerning the
Company and the Company Subsidiaries contained in this Agreement, any Schedule
hereto or in any other certificate, instrument or other document given by the
Company in connection with this Agreement (including each representation and
warranty contained herein or therein), or in the Joint Information Statement is
true, correct and complete and contains no untrue statement of material fact or
omits or will omit to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder severally represents and warrants to Buyer as follows:
4.1 Title to Shares. Such Shareholder is the owner of the number of
Shares indicated on such Shareholder's respective signature page. No other
person or entity has any right, title, or interest, beneficially or of record,
in or to the Shares owned by such Shareholder and such Shares are free and clear
of any claims, liens, encumbrances, security agreements, equities, options,
charges, or restrictions, and can be delivered and surrendered to Buyer pursuant
hereto without obtaining the consent or approval of any other person or
governmental authority. Upon the transfer and delivery of such Shares to Buyer
in accordance with this Agreement and payment therefor, Buyer will become the
owner and holder of all of such Shares free and clear of all liens,
encumbrances, pledges, claims, charges and restrictions on transfer.
4.2 Authority. This Agreement constitutes the legal, valid, and
binding obligation of such Shareholder enforceable in accordance with its terms,
subject, as to
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enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally and to
general equitable principles. The consummation of the transactions contemplated
by this Agreement and fulfillment of the terms hereof will not breach any of the
terms and provisions of, or constitute a default by such Shareholder under, any
agreement or instrument to which such Shareholder is a party or by which such
Shareholder is bound, or any statute, ruling, decree, judgment, order or
regulation of any governmental authority having jurisdiction over such
Shareholder or such Shareholder's property; and no consent, approval,
authorization or order of any court or governmental agency or body is required
for the consummation by such Shareholder of the transactions on such
Shareholder's part contemplated hereby. Except set forth in Schedule 4.2 of the
Schedule, such Shareholder will not be required to give any notice to or obtain
any consent from any Person in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated by this
Agreement.
4.3 Restricted Securities. Such Shareholder understands that the Notes,
the Warrants, the shares of Buyer common stock issuable upon exercise of the
Warrants, and any other securities issued by Buyer under this Agreement
(collectively, the "Securities") will be issued by Buyer without registration
under the Act and without qualification and/or registration under applicable
state securities laws pursuant to exemptions from registration and/or
qualification contained in the Act and applicable state securities laws. Such
Shareholder understands that the foregoing exemptions depend upon, among other
things, the bona fide nature of such Shareholder's investment intent as
expressed herein. None of the Securities nor any interest in the Securities will
be sold, transferred, or otherwise disposed of by such Shareholder without
registration and/or qualification under the Act and applicable state securities
laws unless the sale or other disposition is made in compliance with exemptions
from such registration and qualification requirements with respect to such
resale or disposition and, upon the request of Buyer, such Shareholder, prior to
consummation of any such resale or disposition, provides Buyer an opinion of
counsel satisfactory to Buyer to the effect that the contemplated transfer may
be made without violating the Act or applicable state securities laws.
4.4 Investment Intent. Such Shareholder is acquiring the Securities
for investment purposes only, for such Shareholder's own account and not with a
view to or for sale in connection with any distribution of the Securities to
others within the meaning of the Act.
4.5 Questionnaire. The information contained in the Investor
Questionnaire provided by such Shareholder to the Company in connection with
this transaction is true and correct as of the date hereof and Buyer may rely
upon such information in determining whether exemptions from registration under
federal and applicable state securities laws are available in connection with
any issuance of Securities under this Agreement.
4.6 Purchaser Representations. Such Shareholder has received all of
the information Shareholder considers necessary or appropriate to evaluate the
risks and merits of an investment in Buyer, and has had an opportunity to
discuss Buyer's business, management, financial affairs and prospects with
Buyer's management. Such Shareholder is able to bear the economic risks related
to a purchase of the Securities. Such Shareholder either has a pre-existing
personal or business relationship with Buyer or any of its officers, directors
or controlling persons, or by reason of such Shareholder's business or financial
experience or the
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business or financial experience of its professional advisor who is not
affiliated with and is not compensated by Buyer or any affiliated or selling
agent of Buyer, directly or indirectly, has the capacity to protect such
Shareholder's own interests in connection with the subject transactions.
4.7 Residence. Such Shareholder's principal residence is shown below
such Shareholder's signature on the signature page.
4.8 Legends. Such Shareholder acknowledges that the certificates
representing any of the Securities to be issued to such Shareholder will contain
legends which prohibit an offer to transfer or a transfer of all or any portion
of the Securities unless the Securities are registered under the Act or unless
an exemption from registration is available with respect to such resale or
disposition.
Buyer need not register, and may instruct its transfer agent not to transfer, a
transfer of any Securities unless the conditions set forth in this Article IV
are satisfied.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Conduct of Business by the Company. The Company, the Management
Shareholders and the Shareholders, as applicable, agree that from the date
hereof until the Closing, except as otherwise approved in writing by Buyer:
(a) The Management Shareholders shall cause the Company to,
and the Company shall, carry on its business and operations diligently and
substantially in the manner carried on as of the date hereof and shall not make
or institute any material changes in its methods of purchase, sale, management,
accounting or operation.
(b) No Shareholder shall pledge, assign or otherwise transfer
any portion of such Shareholder's interest in the Shares.
(c) The Management Shareholders shall cause the Company to,
and the Company shall, take such reasonable action as may be necessary to
maintain, preserve, renew and keep in effect the existence, rights and
franchises of the Company and shall use its reasonable efforts to preserve the
business organization of the Company intact, to keep available to Buyer the
present officers and employees, and to preserve for Buyer its present
relationships with suppliers and customers and others having business
relationships with the Company.
(d) The Management Shareholders shall cause the Company to
not, and the Company shall not, enter into any new sales representative, dealer
or distributor contracts, or amend any existing contracts, without the prior
written consent of Buyer, regardless of the fact that any such individual
contract or amendment might otherwise be in the ordinary course of business.
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(e) The Management Shareholders shall cause the Company to
not, and the Company shall not, amend its Articles of Incorporation or Bylaws or
make any changes in authorized or issued capital stock, including, without
limitation, any issuance of additional shares or granting of any rights, options
or warrants to acquire any capital stock of the Company.
(f) The Management Shareholders shall cause the Company to,
and the Company shall, maintain all of the insurance in effect as of the date
hereof.
(g) The Management Shareholders shall cause the Company to,
and the Company shall, use, operate, maintain and repair all property of the
Company in the ordinary course of business.
(h) The Management Shareholders shall cause the Company to,
and the Company shall, promptly provide Buyer with interim monthly financial
statements and other management reports as and when they are available.
(i) Other than certain bonuses paid to Xxxx Xxxxxxxx in
connection with this Agreement, the Management Shareholders shall cause the
Company to not, and the Company shall not: (i) declare, set aside or pay any
dividend or any other distribution; engage in any redemption, purchase or other
acquisition by the Company of any capital stock of the Company, or any security
relating thereto; or make any other payment to any Shareholder (other than
compensation on a basis consistent with past practice of the Company); or (ii)
increase any compensation, salaries or wages payable or to become payable to any
employee or agent of the Company (including, without limitation, any increase or
change pursuant to any bonus, pension, profit sharing, retirement or other plan
or commitment), or any bonus or other employee benefit granted made or accrued,
except compensation increases which have been committed to previously by the
Company or made in the ordinary course of business.
(j) The Management Shareholders shall cause the Company to
not, and the Company shall not, make any change (whether or not material) in the
Company's accounting procedures, methods, policies or practices or the manner in
which the Company maintains its records.
(k) The Management Shareholders shall cause the Company to
not, and the Company shall not, make any capital expenditures other than in the
ordinary course of business.
(l) The Management Shareholders shall cause the Company to
not, and the Company shall not, file any federal, state or local tax return
without the prior written consent of Buyer.
(m) Except as expressly provided in this Agreement, the
Management Shareholders shall cause all indebtedness owed to the Company by any
Shareholder or any Affiliate of any Shareholder to be paid in full prior to
Closing.
(n) The Management Shareholders shall cause the Company to
not, and the Company shall not, reclassify or otherwise cause an increase in its
current assets or decrease
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in its current liabilities, other than in the normal course of the Company's
business as conducted over the prior three months, and in no event will the
Company increase any long-term indebtedness resulting in either an increase in
current assets or decrease in current liabilities or sell or otherwise dispose
of its non-current assets.
5.2 Access and Information; Confidentiality. Each of the Company and
Buyer shall afford to the other and to the other's accountants, counsel and
other representatives full access during normal business hours (and at such
other times as the parties may mutually agree) throughout the period prior to
the Closing Date to all of its properties, books, contracts, commitments,
records and personnel and, during such period, each shall furnish promptly to
the other all other information concerning its business, properties and
personnel as the other may reasonably request. Each of the Company and Buyer
shall hold, and shall cause their respective employees and agents to hold, in
confidence all such information in accordance with the terms of the
Confidentiality Agreements dated May 23, 1997 between the Company and Buyer.
Upon termination of this Agreement, each of the Company and Buyer will, if so
requested in writing by the other party, promptly return to the other party or
destroy all documents or other materials received from the other party.
5.3 Shareholders' Representative.
(a) In order to administer efficiently the rights and
obligations of the Shareholders under this Agreement, the Shareholders hereby
designate and appoint Xxxxxx Xxxxx as the Shareholders' Representative, to serve
as the Shareholders' agent and attorney-in-fact for the limited purposes set
forth in Section 5.3(b) of this Agreement.
(b) Each of the Shareholders hereby appoints the Shareholders'
Representative as such Shareholder's agent, proxy and attorney-in-fact, with
full power of substitution, for all purposes set forth in this Agreement,
including, without limitation, the full power and authority on such
Shareholder's behalf (i) to consummate the transactions contemplated by this
Agreement, (ii) to disburse any funds received hereunder to the Shareholders,
(iii) to enter into the Disbursement Agent Agreement, Rights Agreement and
Security Agreement on behalf of the Shareholders, (iv) to execute and deliver
any certificates representing the Shares and execution of such further
instruments of assignment as Buyer shall reasonably request, (v) to execute and
deliver on behalf of each Shareholder any amendment or waiver under this
Agreement, (vi) to retain legal counsel and other professional services, at the
expense of the Shareholders, in connection with the performance by the
Shareholders' Representative of this Agreement, (vii) to execute financing
statements, termination statements and other documents on behalf of the
Shareholders under the Security Agreement and (viii) to do each and every act
and exercise any and all rights which such Shareholder or Shareholders are
permitted or required to do or exercise under this Agreement and the other
agreements, documents and certificates executed in connection herewith. Each of
the Shareholders agrees that such agency and proxy are coupled with an interest,
are therefore irrevocable without the consent of the Shareholders'
Representative and shall survive the death, bankruptcy or other incapacity of
any Shareholder; provided that such agency and proxy shall terminate if this
Agreement is terminated pursuant to its terms.
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(c) Each of the Shareholders hereby agrees that any amendment
or waiver under this Agreement, the Disbursement Agent Agreement, the Rights
Agreement, the Security Agreement or the Securities, and any action taken on
behalf of the Shareholders to enforce the rights of the Shareholders under this
Agreement and the Notes or the Warrants, and any action taken with respect to
any indemnification claim pursuant to Section 8.4 (including any action taken to
object to, defend, compromise or agree to the payment of such claim), shall be
effective if approved in writing by the Shareholders' Representative and the
holders of a majority of the Shares (including any Shares held by the
Shareholders' Representative), or, in the case of any amendment or waiver made
or given or action taken after the Closing, if so approved by persons who were
the holders of a majority of the Shares immediately prior to the Closing, and
that each and every action so taken shall be binding and conclusive on every
Shareholder, whether or not such Shareholder had notice of, or approved, such
amendment or waiver.
(d) Upon signing of this Agreement, each Shareholder shall
deliver to the Shareholders' Representative a certificate or certificates
representing the Shares being sold by such Shareholder under this Agreement,
duly endorsed (or accompanied by duly executed stock powers), for delivery by
the Shareholders' Representative to Buyer at the Closing. Upon termination of
this Agreement for any reason, such certificates shall be returned by the
Shareholders' Representative to the Shareholders.
(e) Xxxxxx Xxxxx shall serve as the Shareholders'
Representative until he resigns or is otherwise unable or unwilling to serve. In
the event that a Shareholders' Representative resigns from such position or is
otherwise unable or unwilling to serve, the remaining Shareholders shall select,
by the vote of the holders of a majority of the Shares, a successor
representative to fill such vacancy, shall provide prompt written notice to
Buyer of such change and such substituted representative shall then be deemed to
be the Shareholders' Representative for all purposes of this Agreement.
5.4 Notice of Breach. Each of the Buyer, the Company and the
Shareholders shall promptly give written notice to the others upon becoming
aware of the occurrence or, to its, her or his knowledge, impending or
threatened occurrence, of any event which would cause or constitute a breach of
any of its, her or his representations, warranties or covenants contained or
referenced in this Agreement and will use its, her or his reasonable efforts to
prevent or promptly remedy the same.
5.5 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use all reasonable and diligent
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
5.6 Board Representation. Effective upon the Closing, Buyer shall
appoint one representative of the Shareholders (which representative shall be
designated by the Shareholders' Representative) to the board of directors of
Buyer. In addition, from the period beginning on the Closing Date and ending on
the earlier of (a) the closing of an initial public offering by Buyer, and (b)
the later of (i) payment of all amounts due under Section 1.2(d) and 1.3 and
(ii) repayment in full of the Notes, Buyer shall nominate one representative of
the Shareholders (which representative shall be designated by the Shareholders'
Representative) for election by
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the stockholders of Buyer to the board of directors of Buyer at any annual
meeting of the stockholders of Buyer held during such period. Buyer shall cause
the Stockholders Voting Agreement dated May 31, 1996, as amended (the "Voting
Agreement"), by and among the Company and certain stockholders of the Company to
be amended to provide that during the period set forth in this Section the
parties to that Voting Agreement shall vote their shares covered by that Voting
Agreement in favor of the individual so designated by the Shareholders'
Representative.
5.7 No Negotiations. Until such time, if any, as this Agreement is
terminated pursuant to Section 7, the Company and the Shareholders will not,
directly or indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, or provide any non-public information
to, any Person (other than Buyer) relating to any transaction involving the sale
of the business or assets (other than in the ordinary course of business) of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company. The Company will promptly notify Buyer of any proposal or inquiry,
including the identity of the Person and its Affiliates making the same, that it
may receive in respect of any such transaction, or of any such information
requested from it or any such negotiations or discussions being sought to be
initiated with it.
5.8 Announcements. The notices to the general public and the press
relating to the transactions contemplated by this Agreement shall be made only
at such time and in such manner as may be mutually agreed upon by Buyer and the
Shareholders' Representative; provided, however, that any party shall be
entitled to make a public announcement about such transactions if, in the
opinion of its counsel, such announcement is required to comply with any
applicable law, rule or regulation. Information provided by either party to
third parties whose assistance and cooperation may, in the judgment of such
informing party, be required to the successful consummation of the transactions
contemplated by this Agreement, and information provided by either party to its
employees with respect to such transactions, shall not be construed as a general
notice, release, statement or communication within the meaning or intent of this
section.
5.9 General Release by Shareholders. Each Shareholder hereby fully
releases and discharges the Company and its directors, officers, agents and
employees from all rights, claims and actions, known or unknown, of any kind
whatsoever, which such Shareholder now has or may hereafter have against the
Company and its directors, officers, agents and employees, arising out of or
relating to events arising prior to or on the Closing Date, except (a) as may be
described in written contracts disclosed in the Schedule hereto and expressly
described and specifically excepted from this release in the Schedule, (b) in
the case of Shareholders who are employees of the Company, compensation for
current periods expressly described and excepted from such releases, and (c) for
the obligations of the Company arising after the Closing Date under this
Agreement and the other agreements described in Section 1.7 to which the Company
is a party. Specifically, but not by way of limitation, each Shareholder waives
any right of indemnification, contribution or other recourse against the Company
which it now has or may hereafter have against the Company with respect to
representations, warranties or covenants made in this Agreement by the Company.
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Each Shareholder hereby waives and relinquishes all rights and benefits
afforded by Section 1542 of the California Civil Code, which states as follows:
"A general release does not extend to claims to which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
Each Shareholder understands and acknowledges the significance and consequence
of this waiver of Section 1542 and nevertheless elects to, and does, release
those claims described in this Section 5.9, known or unknown, that it may have
now or in the future arising out of or relating to any event arising on or prior
to the date of this Agreement.
5.10 Additional Shareholders. The parties agree that additional
shareholders of the Company may become parties to this Agreement after the
Closing Date. In such event, (i) each such shareholder shall become a
"Shareholder" for purposes of this Agreement and entitled to all of the rights
and subject to all of the obligations of a Shareholder under this Agreement,
(ii) the Participating Percentage shall be adjusted to reflect the inclusion on
such shareholder, (iii) such shareholder shall immediately receive a cash
payment equal to such shareholder's ratable interest in the Closing Cash Payment
and a Note and a Warrant equal to such shareholder's ratable portion of the
Notes and Warrants, and (iv) the Initial Disbursement Amount shall be increased
by an amount equal to $6,500,000 times the percentage of issued and outstanding
shares of common stock of the Company held by such shareholder as of the Closing
Date.
5.11 Maintain Directors and Officers Liability Insurance. The Buyer
shall cause the Company to maintain in effect for a period of two years after
the Closing Date the directors and officers liability insurance in effect on the
Closing Date.
5.12 Legend Removal. The Company and the Shareholders will use their
best efforts to either (i) obtain an order from the California Commissioner of
Corporations approving the sale of the Shares to the Buyer or (ii) cause the
removal of all legends imposed by the California Commissioner of Corporations
from any certificates representing Shares being transferred under this
Agreement.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Buyer's Obligations to Close. The obligation of
Buyer to purchase the Shares from the Shareholders and to take other actions
required to be taken by Buyer at the Closing shall be subject to the fulfillment
at or prior to the Closing Date of the additional following conditions, any of
which may be waived in whole or in part by Buyer only in writing:
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(a) The Company and each of the Shareholders shall have
performed in all material respects their agreements contained in this Agreement
required to be performed on or prior to the Closing Date and the representations
and warranties of the Company and the Shareholders contained in this Agreement
shall be true in all material respects when made and on and as of the Closing
Date as if made on and as of such date, and Buyer shall have received a
certificate of the President of the Company to that effect.
(b) Each of the consents identified in Section 3.4 of the
Schedule must have been obtained and must be in full force and effect.
(c) No circumstances shall have occurred which, in the
reasonable judgment of Buyer, constitute a material adverse change in the
business, assets or prospects of the Company.
(d) The issuance of any Securities to each Shareholder under
this Agreement shall, in the reasonable judgment of Buyer, be exempt from
registration under the Act and from registration and/or qualification under
applicable state securities laws.
(e) All approvals required from the stockholders of Buyer,
whether required under Buyer's charter documents or contract, for the
consummation of the transactions contemplated by this Agreement shall have been
obtained.
(f) Buyer shall have obtained on terms and conditions
reasonably acceptable to Buyer debt and/or equity financing in the amount of at
least $24 million.
(g) Receipt of an order from the California Commissioner of
Corporations, if required in the reasonable opinion of counsel for the Company,
approving the sale of the Shares to the Buyer or, alternatively, removing any
restrictions on transfer imposed by the Commissioner.
(h) The Company and the Shareholders shall have delivered each
of the documents required to be delivered at the Closing under Section 1.7(a).
6.2 Conditions to Shareholders' Obligation to Close. The obligations
of the Shareholders to sell their Shares and to take other actions required to
be taken by them at the Closing shall be subject to the fulfillment at or prior
to the Closing Date of the additional following conditions, any of which may be
waived in whole or in part by the Shareholders' Representative only in writing:
(a) Buyer shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date and the representations and warranties of Buyer contained in
this Agreement shall be true in all material respects when made and on and as of
the Closing Date as if made on and as of such date, and the Shareholders shall
have received a certificate of the President of Buyer to that effect.
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(b) Buyer shall represent to the Shareholders that as of the
Closing Date it has no debt outstanding senior to the Notes other than any
indebtedness incurred to pay the Purchase Price.
(c) No circumstances shall have occurred which, in the
reasonable judgment of Shareholders' Representative, constitute a material
adverse change in the business, assets or prospects of Buyer, other than such
circumstances which relate to the Company.
(d) Buyer shall have delivered each of the documents required
to be delivered at the Closing under Section 1.7(b) and (c).
(e) The Amended Investor Rights Agreement dated March 31, 1997
among certain stockholders of Buyer shall have been amended to provide that the
Shareholders shall have the registration rights set forth in that Agreement with
respect to any shares of common stock issued upon exercise of the Warrants.
(f) The Voting Agreement shall be amended as provided in
Section 5.6.
(g) Receipt of an order from the California Commissioner of
Corporations, if required in the reasonable opinion of counsel for the Company,
approving the sale of the Shares to the Buyer or, alternatively, removing any
restrictions on transfer imposed by the Commissioner.
(h) Buyer shall have obtained a waiver from each of Fantastix
Ticket Company, LLC and Playhouse Square Foundation deferring their right to
require Buyer to repurchase shares of Buyer Common Stock until such time as the
Notes have been repaid.
ARTICLE VII
TERMINATION
7.1 Termination Events. This Agreement may, by notice given prior to
or at the Closing, be terminated:
(a) by either Buyer or the Company if a material breach of any
representation, warranty, covenant or agreement contained in this Agreement has
been committed by the other party and such breach has not been cured within ten
(10) days following receipt of written notice;
(b) (i) by Buyer if any of the conditions in Section 6.1 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement) and Buyer has not waived such condition on
or before the Closing Date; or (ii) by the Company, if any of the conditions in
Section 6.2 has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of the
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Company or any Shareholder to comply with their obligations under this
Agreement) and the Company has not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and the Company; or
(d) by either Buyer or the Company if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before November 30, 1997, or such later date as the parties may agree upon.
7.2 Effect of Termination. Each party's right of termination under
Section 7.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Section 5.2, Section 5.8, Article VIII, Section 9.5 and
Section 9.11 will survive; provided, however, that if this Agreement is
terminated by a party because of the breach by the other party or because one or
more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's right to
pursue all legal remedies will survive such termination unimpaired.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES: INDEMNIFICATION
8.1 Survival of Representations and Warranties. The representations
and warranties of each of the parties contained herein shall survive the signing
of this Agreement and remain in full force and effect after the Closing Date,
regardless of any investigation by the other parties or their agents; provided,
however, such representations and warranties shall terminate at the later of (i)
such time as all payments have been made under Section 1.2(d) and Section 1.3,
and (ii) the maturity date of the Notes.
8.2 Indemnification by the Company and the Shareholders. The Company
and each of the Shareholders, jointly and severally, shall indemnify and hold
harmless Buyer, its officers, agents, directors, employees, affiliates
(including the Company, after the Closing), successors and assigns
(collectively, the "Buyer Indemnified Parties") from and against any and all
expenses (including, without limitation, attorneys' fees and costs), damages,
liabilities or other monetary loss resulting from any and all claims, demands or
threats thereof arising out of or relating to (i) any breach of the
representations, warranties, covenants or agreements of the Company or the
Shareholders contained in this Agreement; or (ii) that certain [***] Agreement
dated [***], by and between [***], and the Company, as amended by Amendment No.
1 to [***] Agreement dated [***], and Amendment No. 2 to [***] Agreement dated
[***] (the "[***] Agreement"), including but not limited to, payment obligations
thereunder (excluding only (x) any amounts due for enhancements or support under
Section 12 of the [***] Agreement accruing
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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after the Closing, (y) the payment of $[***] in quarterly royalty payments
pursuant to Section 2 of the [***] Agreement through December 31, [***] and (z)
the payment of Additional Royalties pursuant to Section 3 of the [***] Agreement
for calendar years after 1997 if, and only if, such Additional Royalties are due
as a result of tickets actually sold by the Company using the [***]), or the
breach, alleged breach or termination of the [***] Agreement; provided, however,
that, with respect to clause (ii) above, once the Shareholders have indemnified
the Buyer Indemnified Parties for an aggregate of $[***] under clause (ii), the
next $[***] for which indemnification would otherwise be due Buyer Indemnified
Parties thereunder shall not be indemnifiable, but any amount thereafter shall
again be indemnifiable by the Shareholders; and provided further, however, that
upon the Closing, the Company shall cease to have any indemnification
obligations pursuant to this Section 8.2 and the Shareholders shall have no
right of contribution from the Company with respect to their indemnification
obligations. Notwithstanding the foregoing, the Shareholders shall not have any
indemnification obligation to Buyer pursuant to this Section 8.2(ii) with
respect to the [***] Agreement for any breach or alleged breach thereof
occurring after the Closing if such breach or alleged breach is not in
connection with the Acquisition and is the result of actions by the Company not
contemplated by the Buyer and the Company at the time of the Closing.
8.3 Indemnification By Buyer. Buyer shall indemnify and hold
harmless the Company and the Shareholders, their officers, agents, directors,
employees, affiliates, successors and assigns from and against any and all
expenses (including, without limitation, attorneys' fees and costs), damages,
liabilities or other monetary loss resulting from any and all claims, demands or
threats thereof made or brought against the Company or the Shareholders arising
out of any breach of the representations, warranties, covenants or agreements of
Buyer contained in this Agreement.
8.4 Procedure for Indemnification. In the event a party (the
"Indemnified Party") shall seek indemnification pursuant to this Article VIII,
it shall, with reasonable promptness, provide the other party (the "Indemnifying
Party") with written notice of any facts which may give rise to a Claim for
indemnification (a "Claim"). Within thirty (30) days after delivery of such
notice, the Indemnifying Party shall deliver written notice to the Indemnified
Party indicating that the Claim is either accepted or rejected, in whole or in
part, and if not accepted in whole, either proposing a reasonable settlement of
the Claim or stating the reasons why the Claim (or portion thereof) is rejected.
Any such Claim notice from the Indemnified Party which is not answered within
such thirty (30) day period in the manner set forth above by the Indemnifying
Party shall be conclusively presumed to be accepted by the Indemnifying Party,
and the Indemnified Party may seek immediate indemnification from the
Indemnifying Party. In the event that the Indemnified Party has complied with
the foregoing notice procedure and the Indemnifying Party has rejected, in whole
or in part, such a Claim by the Indemnified Party, and the parties have
otherwise been unable to reach a mutually satisfactory agreement respecting the
alleged breach or default, either party may submit the issue to binding
arbitration as provided in Section 9.5 hereof; provided, however, that the scope
of the issues which shall be submitted to arbitration pursuant to Section 9.5
shall be limited to a determination of (a) whether a basis for indemnification
is present or has occurred, (b) whether the Indemnified Party has suffered or
could reasonably be expected to suffer any loss, damage, claim, liability or
expense pursuant
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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to Section 8.2 or Section 8.3 hereof as a result, and if so, the amount of such
loss, damage, claim, liability or expense, and (c) whether (and to what extent)
actions taken by the Indemnified Party shall have contributed thereto. The
arbitrators shall also award attorneys' fees and costs for the proceedings, in
their discretion. Notwithstanding the foregoing, notice of any Claim made
against the Company or the Shareholders, other than those arising as result of a
breach of the representations and warranties made in Article IV, shall be
provided to the Shareholders' Representative, who shall have sole authority to
respond to and compromise such Claim in accordance with the foregoing
provisions. Likewise, the Shareholders' Representative shall have the sole
authority to seek indemnification from Buyer pursuant to this Article VIII on
behalf of the Shareholders.
8.5 Defense of Claims. In connection with any Claim asserted by a third
party which may give rise to a Claim for indemnification under this Article
VIII, the Indemnifying Party shall be entitled to participate in the defense of
such action and may assume, undertake and pay for the defense thereof and select
legal counsel to conduct the defense of such Claims; provided, however, the
Indemnifying Party may assume and undertake the defense of such a third party
Claim only upon written agreement by the Indemnifying Party that the
Indemnifying Party is obligated to fully indemnify the Indemnified Party with
respect to such action; in the event the Indemnifying Party assumes and
undertakes a defense of a third-party Claim, the Indemnifying Party shall not be
liable to the Indemnified Party for any counsel's fees and expenses subsequently
incurred by the Indemnified Party in connection with such matter; provided,
however, that the Indemnified Party shall have the right to participate in the
defense of any such action and to employ separate counsel in connection
therewith, but the fees, costs and expenses related to such participation shall
be at the expense of and paid by the Indemnified Party. Any payments to be made
pursuant to this Article VIII, including any payment for legal fees or other
expenses, shall be made within 30 days after the receipt of the invoice therefor
from the Indemnified Party. The Indemnifying Party shall have the right to
settle or compromise any such action on terms satisfactory to it provided that
it immediately satisfies any obligations imposed by such settlement. No
settlement of any Claim for which indemnification is or will be claimed shall be
made by the Indemnified Party unless such settlement is approved by the
Indemnifying Party, which approval shall not be unreasonably withheld. Any such
settlement not approved may be settled by the Indemnified Party provided such
settlement shall be submitted to binding arbitration as provided in Section 9.5
hereof to determine whether such settlement under the circumstances at the time
such settlement was made was reasonable, and will constitute a full and complete
release by the Indemnified Party of the Indemnifying Party of all damages,
losses, claims, liabilities and expenses relating to such claim.
8.6 Offset Right. The right of the Buyer Indemnified Parties to
indemnification under this Agreement shall include, but not be limited to, the
right to offset against and have deducted from (i) any payment under the Notes,
(ii) any amounts held by the Disbursement Agent, and (iii) any Incentive
Payments, the amount of any Claim by any Buyer Indemnified Party. The exercise
of such right of offset by the Buyer Indemnified Parties in good faith, whether
or not ultimately determined to be justified, will not constitute a default
under this Agreement, the Disbursement Agent Agreement, the Notes or any
instrument securing the Notes. Except as provided in Section 1.2(d)(ii), nothing
in this Section 8.6 shall be construed as limiting
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the liability of the Shareholders under this Agreement to the amounts which the
Buyer Indemnified Parties are entitled to set off, deduct or recoup, nor shall
such amounts be considered as liquidated damages for any breach under this
Agreement. Buyer agrees to seek the offset and deduction remedies set forth in
this Section 8.6 with respect to payments under the Notes and amounts held by
the Disbursement Agent before pursuing other legal remedies it may have against
the Shareholders. This shall in no way preclude the Buyer from pursuing any
equitable remedies it may have against the Shareholders at any time.
8.7 Limitations on Indemnification.
(a) No amount shall be payable in indemnification under this
Article VIII unless the aggregate amount of claims for which the Indemnified
Party is entitled to indemnification exceeds One Hundred Fifty Thousand Dollars
($150,000) (the "Minimum Amount"); provided, however, the Minimum Amount shall
not apply to any Claim (i) based on fraud; (ii) pursuant to Section 1.2(a); or
(iii) pursuant to Section 8.2 (ii). In the event that the claims exceed the
Minimum Amount, the Indemnified Party shall be entitled to seek indemnifications
only for the aggregate amount of the claims which exceed the Minimum Amount.
(b) In the absence of fraud, no Shareholder's liability under
this Article VIII shall exceed in the aggregate the total Purchase Price paid by
Buyer to all Shareholders; provided, however, that the aggregate liability of a
Non-Management Shareholder shall not exceed the sum of all sums paid to that
Shareholder; and provided further that Buyer shall have the right to offset or
have deducted amounts still payable to a Shareholder (under the Notes or
otherwise) against any liability of the Shareholder for Claims in excess of
amounts paid to that Shareholder.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices, demands, requests, consents, approvals or
other communications (collectively "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and may be personally served or may be deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid, addressed as
follows:
To Buyer: Advantix, Inc.
0000 XxxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attn: President
With Copy To: Xxxxxx & XxXxxxx LLP
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxx
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To the Company: Bay Area Seating Service, Inc.
0000 Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
With Copy To: Shartsis, Xxxxxx & Xxxxxxxx, LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
To the Shareholders: At the address for each
such Shareholders shown on
their signature page
To the Shareholders' Xxxxxx Xxxxx
Representative: 0 Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
or such other address as such party shall have specified most recently by
written notice. Notice mailed as provided herein shall be deemed given on the
fifth business day following the date so mailed or on the date of actual
receipt, whichever is earlier.
9.2 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute but one and the same instrument.
9.3 Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the laws of the State of
California.
9.4 Entire Agreement. The terms of this Agreement are intended by the
parties as a final expression of their agreement with respect to such terms as
are included in this Agreement and may not be contradicted by evidence of any
prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence whatsoever may be introduced in any judicial proceeding,
if any, involving this Agreement.
9.5 Dispute Resolution. Any controversy, dispute, or claim arising out
of or relating to the interpretation, performance or breach of this Agreement
shall be finally determined, at the request of any party, by binding arbitration
conducted in accordance with the then existing rules for commercial arbitration
of the American Arbitration Association, and judgment upon any award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. Such
arbitration shall be conducted in Orange County, California if brought by the
Company (prior to Closing), the Shareholders' Representative or the
Shareholders, and in San Francisco County if brought by Buyer. The arbitrator
shall award to the prevailing party, in addition to the costs of the proceeding,
that party's reasonable attorney's fees.
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9.6 Exhibits and Schedules. Each of the Exhibits and Schedules
referred to herein and attached hereto is an integral part of this Agreement and
is incorporated herein by this reference.
9.7 Further Assurances. The parties agree to do such further acts and
things and to execute and deliver such additional agreements and instruments as
the other party may reasonably require to consummate, evidence, or confirm the
agreements contained herein in the manner contemplated hereby.
9.8 Successors and Assigns. This Agreement and the provisions hereof
shall be binding upon and inure to the benefit of each of the parties and their
respective successors and assigns.
9.9 Attorneys' Fees. In the event any action in law or equity,
arbitration or other proceeding is brought for the enforcement of this Agreement
or in connection with any of the provisions of this Agreement, the prevailing
party or parties shall be entitled to its attorneys' fees and other costs
reasonably incurred in such action or proceeding.
9.10 Equitable Remedies. In addition to legal remedies, to the extent
allowed pursuant to this Agreement or by law, in recognition of the fact that
remedies at law may not be sufficient, the parties hereto (and their successors)
shall be entitled to equitable remedies including, without limitation, specific
performance and injunction.
9.11 Expenses. Each party hereto shall pay its own expenses incident
to the negotiation and preparation of this Agreement and all other documents
necessary or appropriate to consummate the transactions contemplated hereby, and
shall bear its own costs and expenses incurred in closing and carrying out the
transactions contemplated by this Agreement, including any broker's or finder's
fees and the expenses of its representatives. Such costs and expenses incurred
by the Company and unpaid at the Closing shall reduce the cash portion of the
Purchase Price payable under Section 1.2(a). The Shareholders acknowledge that
for its services in connection with the transactions contemplated by this
Agreement, Vrolyk & Company ("Vrolyk") is to be paid a fee of $300,000 from the
funds reserved pursuant to Section 1.2(a)(ii) and two percent (2%) of all sums
to be paid to the Shareholders pursuant to Section 1.2(a)(ii), Section
1.2(a)(iii), Section 1.5, the Notes, from the Initial Disbursement Amount and
the Incentive Payments and two percent of the Warrants, less any amounts offset
against any such payments pursuant to Section 8.6. Accordingly, the Shareholders
hereby each assign to Vrolyk the right to receive two percent (2%) of each such
payment. In the case of the Notes and the Warrants, the Shareholders further
authorize Buyer to reduce the principal amount of the Note deliverable to each
Shareholder by two percent and to reduce the number of shares issuable pursuant
to the Warrant deliverable to each Shareholder by two percent, and instead to
deliver to Vrolyk a Note in a principal amount equal to two percent (2%) of the
principal amount of all of the Notes and a Warrant to purchase a number of
shares of Buyer Common Stock equal to two percent (2%) of all of the shares of
Buyer Common Stock subject to the Warrants.
9.12 Amendment. This Agreement may be amended or modified in whole or
in part at any time prior to the Closing Date by an agreement in writing among
Buyer, the Company and the Shareholders' Representative.
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9.13 Effect of Amendment or Waiver. Each Shareholder acknowledges that
by operation of Sections 5.3 and 9.12, the Shareholders' Representative will
have the right and power to diminish or eliminate rights of such Shareholders
under this Agreement.
9.14 Opportunity to Consult Counsel. Each Shareholder acknowledges
that such Shareholder has had full and adequate opportunity to have this
Agreement reviewed by such Shareholder's independent counsel and to discuss this
Agreement with such counsel. Each Shareholder acknowledges that Shartsis, Xxxxxx
& Xxxxxxxx LLP has acted only as counsel for the Company and for the Management
Shareholders in connection with the transactions contemplated by this Agreement,
and has not represented any of the other Shareholders.
Buyer and the Company have executed this Agreement as of the day and
year first set forth above.
"BUYER"
Advantix, Inc., a Delaware corporation
By: /s/ W. XXXXXX XXXXXX
----------------------------------
Print Name: W. Xxxxxx Xxxxxx
--------------------------
Title: President & CEO
-------------------------------
"COMPANY"
Bay Area Seating Service, Inc., a
California corporation
By: /s/ XXXXXX XXXXX
----------------------------------
Print Name: Xxxxxx Xxxxx
--------------------------
Title: President
-------------------------------
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The undersigned Shareholders have executed this Agreement effective as
of the Closing Date.
"SHAREHOLDERS"
--------------------------------------
Signature of Shareholder
--------------------------------------
Print Name of Shareholder
Number of Shares Owned:
--------------
Address:
----------------------------
----------------------------
----------------------------
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SCHEDULE A
DEFINITIONS
For purposes of the foregoing Agreement, the following definitions
shall apply:
"Adjusted Disbursement Amount" as of a particular date means the
Initial Disbursement Amount, less (i) cumulative quarterly disbursements to the
Shareholders under Section 1.2(d) as of that date, (ii) one-half of the amount
of any compensation and reimbursement to which the Disbursement Agent is
entitled under the Disbursement Agent Agreement.
"Adjusted Payout Factor" shall have the meaning set forth in Section
1.2(d)(iv).
"Adjustment Date" shall have the meaning set forth in Section
1.2(d)(iv).
"Affiliate" means, with respect to any Person, a Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person.
"Buyer" shall have the meaning set forth in the Preamble.
"Closing" means the consummation of the transaction contemplated by
this Agreement. The time, "Closing Date" and place of the Closing are set forth
in Section 1.6.
"Closing Cash Payment" shall have the meaning set forth in Section
1.2(a).
"Company" shall have the meaning set forth in the Preamble.
"Disbursement Agent" means First Trust of California, or any successor
disbursement agent under the Disbursement Agent Agreement.
"Disbursement Agent Agreement" shall mean the disbursement agent
agreement entered into by and among the Disbursement Agent, Buyer and the
Shareholders in substantially the form of Exhibit C.
"Final Adjustment Date" shall have the meaning set forth in Section
1.4(b).
"Free Cash" shall mean the cash balance of the Company that results
directly, and only, from revenue and expenditures from the Company's normal and
recurring operations on and after the Closing Date, plus any amounts previously
released from the Working Capital Account to offset a Free Cash Deficit. Free
Cash will start with a balance on the first day after the Closing at zero
dollars ($0), and be increased (or decreased) thereafter by the net cash
generated (expended) from the Company's normal revenues and expenditures for
such week. In calculating Free Cash, normal and recurring operations will be
understood to exclude expenditures and/or cash flows meeting the following
criteria:
SCHEDULE A
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(a) All expenditures for:
(i) Transition Costs;
(ii) [***] license fees;
(iii) Ticketmaster litigation;
(iv) Acquisition transaction fees of the Shareholders paid
pursuant to Section 1.2(a)(ii); and
(v) One-half of Xxxx Xxxxxxxx'x salary;
(b) Capital expenditures, excluding capital expenditures for
Transition Costs, in excess of $400,000 prior to the
Anniversary Date; and
(c) Any cash amounts transferred to, and/or received from,
Buyer as part of an intercompany funds transfers.
"Free Cash Deficit" shall mean the amount by which Free Cash is less
than zero on any Balance Day.
"Guarantee Shortfall" means (i) the Adjusted Disbursement Amount at the
end of the Measurement Period, plus (ii) any income earned on amounts held by
the Disbursement Agent and not distributable to shareholders pursuant to Section
1.2(d)(vi), plus (iii) if Net Revenue for the Measurement Period is less than
$[***], the product of (A) any amounts deducted from amounts held by the
Disbursement Agent and distributed to Buyer pursuant to Section 8.6, times (B)
Net Revenue for the Measurement Period divided by $[***].
"Incentive Payment" means any amounts payable to the Shareholders
pursuant to Section 1.3.
"Initial Disbursement Amount" means (A) the product of $6,500,000 times
the Participating Percentage, minus (B) $600,000.
"Management Shareholders" means Xxxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxxxxx and Xxxxxxx Xxxxxxxx, individually, and any Shareholder which is a
trust for which any of them serve as a trustee.
"Net Revenue" means (A) all ticketing service revenues of the Company
and Buyer from (1) those venues serviced by the Company's operations centers as
of the Closing, and (2) those venues listed on Schedule B, less (B) any rebates
to venues, performers or promoters.
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
SCHEDULE A
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"Non-Management Shareholders" means all Shareholders other than the
Management Shareholders.
"Notes" shall have the meaning set forth in Section 1.2(b).
"Participating Percentage" means the percentage of the issued and
outstanding shares of common stock of the Company as of the Closing Date which
are sold to Buyer under this Agreement.
"Payout Factor" shall be equal to the Initial Escrow Amount, divided by
$[***].
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization.
"Purchase Price" shall have the meaning set forth in Section 1.2.
"Shareholders" shall have the meaning set forth in the Preamble.
"Shareholders' Representative" shall be Xxxxxx Xxxxx or his successor
as appointed pursuant to Section 5.4.
"Shares" means the shares of Common Stock of the Company being sold by
the Shareholders under this Agreement.
"Significant Client" means those clients of the Company listed on
Schedule C.
"Special Indemnification Account" shall have the meaning set forth in
Section 1.5.
"Transition Costs" shall have the meaning set forth in Section 1.4(a).
"Transition Costs Account" shall have the meaning set forth in Section
1.4(b).
[***] Confidential treatment has been requested for redacted portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
SCHEDULE A
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LIST OF EXHIBITS
TO STOCK PURCHASE AGREEMENT
AMONG ADVANTIX, INC.,
BAY AREA SEATING SERVICE, INC.,
AND
SHAREHOLDERS OF BAY AREA SEATING SERVICE, INC.
Exhibit A - Promissory Note
Exhibit B - Warrant
Exhibit C - Disbursement Agent Agreement
Exhibit D - Employment Agreement (Xxxxxxxx)
Exhibit E - Consulting Agreement (Xxxxxxxxxx)
Exhibit F - Noncompetition Agreements
Exhibit G - Security Agreement
Exhibit H - Noncompetition Agreement (Xxxxxxxx)
Exhibit I - Opinion of Company and Shareholders' Counsel
Exhibit J - Opinion of Buyer's Counsel
Exhibit K - Subordination Agreement
Exhibit L - Disbursement Agent Agreement (Xxxxxxxx)
Exhibit M - Amended and Restated Investor Rights Agreement
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