ASSET PURCHASE AGREEMENT
BY AND AMONG
CCS COMMERCIAL CREDIT SYSTEMS, INC.
AND
TRANSYS CORPORATION
AND ITS
SHAREHOLDERS
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement") effective as of January 1,
1994, is made and entered into by and among CCS COMMERCIAL CREDIT SYSTEMS,
INC., a Florida corporation ("Purchaser"), and TRANSYS CORPORATION, a
Florida corporation ("Seller") and XXXXXX XXXXXXX and X.X. XXXXXXXXXX
XXXXXXX (hereinafter collectively and individually referred to as
"Shareholders").
WHEREAS, upon the terms hereinafter set forth, Purchaser desires to
acquire, and Seller desires to sell to Purchaser, certain assets representing
all of the assets utilized by Seller in connection with the operation of
Seller's Business; and
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, the parties hereby agree as
follows:
1. DEFINITIONS. The following terms, when used in capitalized form within
this Agreement, or within any exhibit or schedule to this Agreement in which
the terms are not otherwise defined, shall have the following meanings:
Agreement shall mean this Asset Purchase Agreement, and all
exhibits, schedules, letters, certificates and instruments attached hereto or
referred to herein.
Assets shall mean all those assets owned by Seller and utilized in
the operation of the Business other than Excluded Assets listed and described
on Exhibit 2, including, without limitation, the assets listed and described
on Exhibit 1, which assets represent substantially all of the material assets
used by Seller in connection with the conduct of the Business other than the
Excluded Assets listed and described on Exhibit 2.
Business shall mean the business of the Seller conducted as of the
date hereof, being (1) the TRAMS software systems and modules which, includes
but it not limited to, collecting, editing, warehousing, correcting,
reformatting, settling and routing transactions between one or more sources
or destinations ("TRAMS"); and (2) the SPA business which includes, but it
not limited to, the maintenance and processing activities for the Simplicity
Payment Association ("SPA"), and all other business activities of the
Seller, all as further represented by the Financial Records.
Closing shall mean that certain Closing consummated pursuant to the
provisions of Section 4.
Closing Date shall mean the date of the Closing to be held pursuant
to the provisions of Section 4.
Environmental Law shall mean any law, statute, regulation, rule,
order, consent decree, settlement agreement or governmental requirement,
which relates to or otherwise imposes liability or standards of conduct
concerning discharges, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials into ambient air, water or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants or
hazardous or toxic wastes, substances or materials, including (but not
limited to) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resource Conservation and Recovery Act
of 1976, as amended, any other so called "Superfund" or "Superlien" law, the
Toxic Substances Control Act, or any other similar Federal, state or local
statutes.
Environmental Permit shall mean any of the Permits required by or
pursuant to any applicable Environmental Law.
Facility or Facilities shall mean those certain real properties and
improvements thereon from which the Business has been transacted as more
fully described within that schedule of real property set forth on Schedule
7.3(ii).
Financial Records shall mean, for purposes of this Agreement, those
Financial Statements and other documents attached to Schedule 7.4 of this
Agreement.
Governmental Authority shall mean the government of the United
States or any state or political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
Intellectual Property shall mean all trademarks, service marks, and
trade names, together with all trade secrets, inventions, formulations,
programs, designs, or drawings, including without limitation, software
relating to the Business, owned or registered in the name of the Seller or to
which Seller has rights as licensee, including without limitation, TRAMS or
SPA, and any name or names derived therefrom, and any other trade names used
by Seller and the goodwill associated therewith.
Permits shall mean all of the licenses, permits, variances, interim
permits, permit applications, approvals or other authorizations under any
law, statute, rule, regulation, order or ordinance applicable to the Company
or otherwise required by any Governmental Authority in connection with the
operation of the Business.
Seller's Knowledge or words of similar import shall mean the actual
knowledge of the Seller's directors and the Seller's shareholders as well as
the actual knowledge of the Seller's president, all vice presidents,
secretary, treasurer after due investigation and inquiry.
-2-
Waste or Contamination Site shall mean any site or location,
wherever located (including, but not limited to, any waste storage container,
drain, landfill, trench, ditch, well, pit, pond, lagoon, impoundment, or
warehouse) where pollutants, contaminants or hazardous or toxic wastes,
substances or materials used or generated by the Seller shall have been
deposited, stored, treated, reclaimed, disposed of, placed or otherwise come
to be located.
2. PURCHASE AND SALE OF ASSETS.
2.1. Assets to be Purchased and Sold. On the terms and conditions set
forth herein, at the Closing, the Seller agrees to sell and transfer to
Purchaser all right, title and interest of Seller in and to all of the
Assets, free and clear of all liens, charges, restrictions and encumbrances
of every kind and nature whatsoever except for the permitted liens,
restrictions and encumbrances reflected on Schedule 7.2.
2.2. Manner of Transfer. The transfer of the Assets to Purchaser at
Closing shall be effected by bills of sale, certificates of title,
assignments, endorsements, licenses, registrations and other good and
sufficient instruments of transfer and conveyance in form reasonably
requested by Purchaser.
2.3. Excluded Assets. All of the assets listed and described on Exhibit
2 are hereby expressly excluded from the Assets and are not being acquired by
Purchaser or transferred by Seller hereunder.
3. ASSUMPTION OF ONLY SPECIFIED LIABILITIES. Except for the liabilities
expressly assumed by the Purchaser as set forth on Exhibit 3, the Purchaser
shall not assume or take subject to, and shall not have any liability for any
obligations, liabilities or indebtedness of the Seller with respect to the
Assets or the operation of the Business, whether absolute, accrued, fixed or
contingent, known or unknown or otherwise. All liabilities and obligations of
Seller not expressly hereby assumed shall continue to be liabilities and
obligations of Seller following the Closing.
As to any liabilities or obligations expressly assumed by the Purchaser
that are guaranteed by the Shareholders, the Purchaser shall either satisfy
such liabilities or obligations or cause the Shareholders' guarantee to be
canceled, at Purchaser's election, at the Closing.
4. THE CLOSING. Subject to the waiver or the satisfaction of all
conditions to Closing set out in Sections 11, 12 and 13 herein, the sale and
purchase provided in this Agreement shall be consummated at a Closing to be
held at the offices of Xxxxxx, Xxxxxxx & Xxxxxx, at 10:00 a.m., local time,
on July 13, 1994, or at such other place and time, or on such other prior
date as the parties hereto shall mutually agree upon; time being of the
essence.
5. PURCHASE PRICE.
5.1. In consideration of the sale and transfer by the Seller to the
Purchaser of the Assets, Purchaser shall pay and deliver the purchase price
as follows ("Purchase Price"):
(a) Cash at Closing. Purchaser shall pay and deliver to Seller the
sum of Fifty Thousand and No/100 Dollars ($50,000.00), payable by
Purchaser to Seller at Closing in readily available funds.
(b) Installment Payments. Purchaser shall pay and deliver to Seller
installment payments in the aggregate amount of Three Hundred
Thousand and No/100 ($300,000.00), payable in twelve (12) monthly
installments of $25,000.00 each, beginning on August 1, 1994, and
ending on July 1, 1995, evidenced by a promissory note in the form
attached as Exhibit 7. Such note shall either be made by or
guaranteed by CCS Technology Group, Inc.
5.1. [Reserved!
5.2. [Reserved!
5.3. Allocation of Purchase Price. Purchaser and Seller acknowledge
and agree that the payment of the Purchase Price shall be allocated among the
Assets in the manner set forth in Exhibit 4 attached hereto.
5.4. Sales and Transfer Taxes and Fees. Seller and Purchaser agree to
cooperate reasonably to do all things necessary to ensure that appropriate
exemptions are obtained from payment of any sales or use tax with respect to
any sale, conveyance, assignment, transfer or delivery of the Assets. All
applicable sales, use, transfer, documentary, or other similar taxes and fees
that are determined to be payable by reason of or in connection with the
sale, conveyance, assignment, transfer or delivery of the Assets, whether
levied on Seller or Purchaser, shall be borne and paid by Seller.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
and warrants, and agrees to represent and warrant at Closing, that:
6.1. Formation, Good Standing and Power. Purchaser has been or will be
at Closing duly formed and validly existing as a corporation in good standing
under the laws of the State of Florida, with power to own its properties and
conduct its business as now being conducted and is or will be at Closing duly
qualified for the transaction of business and in good standing under the laws
of the State of Florida.
6.2. Due Authorization. This Agreement and the performance by the
Purchaser hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate actions of
Purchaser. This Agreement has been or will be at Closing duly authorized,
executed and delivered by Purchaser, and is a valid and binding obligation of
Purchaser enforceable in accordance with its terms, except as the enforcement
hereof may be limited by bankruptcy and other laws affecting the rights of
creditors generally and except that the enforceability of the obligations
hereunder is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding at equity or at law).
6.3. No Breach of Conflicting Laws or Agreements. The execution and
delivery of this Agreement by Purchaser does not and the performance of this
Agreement and the consummation of the transactions herein contemplated will
not result in any breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, note
or agreement, lease or other agreement or instrument to which Purchaser or
any of its properties is a party or by which Purchaser is bound, Purchaser's
articles of incorporation or bylaws, or any statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction
over Purchaser or any of its properties; and no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by Purchaser of the transactions contemplated
by this Agreement.
7. REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS. Seller and
the Shareholders hereby, jointly and severally, represent and warrant, and
agree to represent and warrant at Closing, that:
7.1. Corporate Statue of Seller; Due Authorization; No Conflict.
(a) Incorporation, Good Standing and Power. Seller has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Florida with corporate
power to own its properties and conduct its business as now being
conducted, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where failure to be so qualified would not
materially and adversely affect the business properties or
condition (whether financial or otherwise) of Seller. Complete and
correct copies of Seller's Articles of Incorporation and Bylaws,
as amended to date, have been delivered to Purchaser and are
included in Schedule 7.3(i) hereto. Seller has no subsidiaries or
equity interest in any other entity.
(b) Due Authorization. This Agreement, and the performance by the
Seller hereunder and the consummation of the transactions
contemplated hereby have
been duly authorized by all necessary corporate action of the
Seller. This Agreement has been duly executed and delivered by
Seller, and the Agreement is a valid and binding obligation of
Seller and Shareholders enforceable in accordance with its terms,
except as the enforcement hereof may be limited by bankruptcy and
other laws affecting the rights of creditors generally and except
that the enforceability of the obligations hereunder is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at equity or at law).
No other corporate action on the part of the Seller is necessary
to authorize the execution and delivery of this Agreement and the
performance by the Seller of its obligations hereunder.
(c) No Breach or Conflict With Laws or Agreements; No Approvals or
Notices Required. The execution and delivery of this Agreement by
Seller does not, and the performance by Seller of Seller's
obligations under this Agreement and the consummation by Seller of
the transactions herein contemplated will not, (i)violate (without
the giving of notice or lapse of time or both) any provision of
law applicable to Seller, (ii)violate Seller's certificate of
incorporation or bylaws, as amended to date, or any statute,
order, or regulation currently in force or of any court or
governmental agency or body having jurisdiction over Seller or any
properties of Seller, (iii)result in any breach or violation of
any terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, promissory note, lease or
other agreement or instrument to which Seller is a party or by
which Seller or any of its properties are bound, result in
acceleration of (or give anyone the right to accelerate) the
performance of, any obligation of Seller, or result in the
creation of any lien or charge upon any of the Assets, and
(iv)except as specified on Schedule 10.3 require consent,
approval, filing or notice under any agreement or provision of law
applicable to the Seller.
7.2. Title to Assets, Powers to Convey and Condition.
(a) Assets. Exhibit 1 comprises a complete and accurate list of
substantially all of the material Assets and Exhibit 2 comprises a
complete and accurate list of the Excluded Assets. Subject to the
consents specified on Schedule 10.3, Seller has the right, power
and authority to enter into this Agreement and, at Closing, will
have the right, power and authority to sell, convey, assign,
transfer and deliver the Assets. The Assets constitute and
represent all of the assets that are utilized by Seller to conduct
the Business. Except as set forth on Schedule 7.2, Seller has good
and valid title to the Assets free and clear of all mortgages,
pledges, liens, security interests, encumbrances and restrictions
of every kind and nature. Except as specified on Schedule 7.2,
upon transfer of the Assets to the Purchaser and payment therefor
pursuant hereto, Purchaser shall have good and marketable title to
the Assets or, in the case of leasehold interest, valid and
enforceable leasehold interest, free and clear of all mortgages,
deeds of trust, pledges, liens, charges, security interests,
encumbrances, claims and restrictions whatsoever.
(b) Real Property Owned or Leased: Permitted Liens. Schedule 7.3(ii)
contains a list and a brief description of all real estate
relating to or used in the operation of the Business, and the
improvements (including buildings and other structures) located on
such real estate (including a brief description of the use to
which such property is being employed) and the termination date or
notice requirement with respect to termination, annual rental and
renewal or purchase options. All of such real estate and
improvements thereon are in good condition and working order,
ordinary wear and tear excepted. Seller owns no real property.
With respect to real estate leased (as listed on Schedule
7.3(ii!): (i)all such leases are in full force and effect and
constitute valid and binding obligations of Seller, and to
Seller's knowledge, the other parties thereto, (ii)there have not
been any and there currently are no material defaults thereunder
by Seller or to Seller's knowledge any other party, (iii)no event
has occurred which (whether with or without notice, lapse of time
or the happening or occurrence of any other event) would
constitute a material default thereunder entitling the lessor
thereof to terminate any such lease, (iv)the continuation,
validity and effect of all such leases under the current rental
terms and other current material terms thereof will in no way be
affected by the transfer of such leases to Purchaser under this
Agreement or, if any would be affected, Seller will have caused an
appropriate consent as listed on Schedule 10.3 to such transfer to
be delivered to the Purchaser at or prior to the Closing at no
cost or other adverse consequence to the Purchaser, and (v)all
Permitted Liens, to which such leases are subject, are described
in Schedule 7.2. All improvements located on such real estate,
whether owned or leased by Seller, conform in all material
respects to all applicable federal, state and local laws and
regulations and such properties are zoned for the various purposes
for which such real estate is currently being used.
As used herein, the term "Permitted Liens" means any and all
mortgages, pledges, liens, charges, security interests,
encumbrances and restrictions to which any of the Assets are
subject and which are listed on Schedule 7.2.
(c) Personal Property Owned or Leased. Exhibit 1 contains a list of
each material item of machinery, equipment, office furniture,
automobiles, trucks and other personal property (collectively, the
"Personal Property") of the Business being transferred to the
Purchaser as part of the Assets, including a description of all
Permitted Liens to which such Personal Property is subject. All
such Personal Property is in good condition and working order and
the operation or use thereof is not in violation of any applicable
building code, zoning ordinance, lease, law or regulation.
Schedule 7.3(ix) contains a list and brief description of each
lease or other agreement under which Seller leases, licenses,
holds or operates any item of Personal Property in connection with
the Business. With respect to such leases or other agreements,
(i)all such leases and agreements are in full force and effect and
constitute legal, valid and binding obligations of Seller, and to
Seller's knowledge,
the other parties thereto, (ii)there have not been and there
currently are not any material defaults thereunder by Seller, or
to Seller's knowledge, any other party, (iii)no event has occurred
which (whether with or without notice, lapse of time or the
occurrence of any other event) would constitute a material default
thereunder, (iv)the continuation, validity and effectiveness of
all such leases and agreements under the current rental terms and
other current material terms thereof will in no way be affected by
the transfer of such leases and agreements to Purchaser under this
Agreement or, if any would be affected, Seller has caused
appropriate consent as listed on Schedule 10.3 to such transfer to
be delivered to Purchaser at or prior to the Closing at no cost or
other adverse consequences to the Purchaser, and (v)all Permitted
Liens to which such leases and agreements are subject, are
described in Schedule 7.2. Inventory transferred as part of the
Assets hereunder comprises only stock of quantity and quality
consistent with the quantity and quality of inventory historically
maintained by the Seller.
7.3. Contracts, Agreements and Other Documents. Attached to Schedule
7.3(i) are complete and correct copies of Seller's Articles of Incorporation
(including all amendments thereto) and Bylaws. Prior to Closing, Seller will
provide to Purchaser and its counsel complete and accurate copies or
originals of all minutes of Shareholders' and Board of Directors' meetings or
other meetings of any governing group, board, body or committee, unanimous
consents taken in lieu of formal meetings thereof, and any other written
evidence of action taken by any controlling group of Seller in connection
with the sale contemplated by this Agreement. Schedules 7.3(ii) through
7.3(ix) together with disclosures made pursuant to other Schedules constitute
a complete and correct list of the following described documents which
pertain in any way to the Assets or the Business, complete and correct copies
of which have been provided or made available to Purchaser and its counsel.
Schedule Description
-------- -----------
7.3 (ii) All deeds of title and other title documents pertaining to
any real property (including a brief description of such documents
and of the use to which such property is being employed), any
interest therein, now or previously owned of record or
beneficially by the Seller and used as a part of the Business,
together with copies thereof; and all lease agreements for all
property, real or personal, to which Seller is a party, including
without limitation lease agreements for all Facilities, together
with complete schedules pertaining thereto listing individually
all such property leased by item.
7.3 (iii) All insurance policies currently in force issued to or in
favor of Seller covering any or all risks of any nature whatsoever.
7.3 (iv) All loan agreements, notes payable or other debt instruments
or obligations issued, guaranteed or assumed by Seller or for
which Seller or the Assets are otherwise obligated or bound
(including any guaranty or obligation of
any Shareholders on behalf of Seller or in connection with the
Business or Assets).
7.3 (v) All contracts in Seller's possession which pertain in any way
to the conduct or operation of the Business, including without
limitation, union agreements, sale and lease-back agreements,
conditional sale agreements, bids, equipment maintenance
agreements, marketing or advertising agreements, sale or supply
contracts, purchase contracts, joint venture agreements, license
agreements, royalty agreements, secrecy, confidentiality and
non-disclosure agreements, commission brokerage, agency or similar
agreements, escrow agreements, delivery agreements, shipment
agreements, and any other agreement in Seller's possession in any
way pertaining to the Business.
7.3 (vi) All loans or advances (hereinafter "Company Loans")
outstanding from Seller to any officer, director, shareholder,
employee, agent, or independent contractor of the Business, or to
any person related to any of the foregoing, or to any corporation,
partnership or other entity of which any of the foregoing possess
any interest, such list to state the amount of the loan, the
person or entity obligated to repay, the interest rate thereon,
and the terms of repayment.
7.3 (vii) A summary of the terms of all material oral contracts of
which any officer of Seller has knowledge, to the extent that any
such oral contract will be binding upon the Business following the
Closing Date.
7.3 (viii) All franchise or license agreements held or granted by
the Seller or necessary for the operation of the Business of the
Seller.
7.3 (ix) All equipment leases held or granted by the Seller or
necessary for the operation of the Business of the Seller.
7.3 (x) A listing of all material defaults with respect to any of the
matters referenced in Schedules 7.3(ii)-(ix).
To Seller's knowledge, except as set forth in Schedule 7.3(x), all notes
and debt instruments issued, guaranteed or assumed, contracts or agreements,
referred to in this Agreement or any Schedule hereto are valid and in full
force and effect and are enforceable by Seller in accordance with the
respective terms, except as the enforcement thereof may be limited by
bankruptcy and other laws affecting the rights of creditors generally and
except that the enforcement of the obligations thereunder is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding of equity or at law). Except as set forth on
Schedule 7.3(x), Seller has not breached, or received notice of any claim
that Seller has breached, any provision of, and Seller is not in material
default, and has not received notice of any claim that Seller is in default,
under the terms of any note, debt instrument, contract,
agreement, plan, lease, policy, franchise or license, and, to Seller's
knowledge, no other party has breached any provision of, or is in default
under the terms of, any note, debt instrument, contract, agreement, plan,
lease, policy, franchise or license, to Seller's knowledge, no facts or
circumstances exist, which with the passage of time or the giving of notice,
will constitute breach or default thereunder, and no claims, defenses or
offsets are available thereunder. Except as set forth on Schedule 7.3(i),
Seller has no outstanding power of attorney.
7.4. Financial Records. Attached for the Seller and the Business as
Schedule 7.4 are: (i) a balance sheet as of December 31, 1992, and related
statements of income for the twelve months ended December 31, 1992, together
with related statements of stockholders' equity and statements of cash flows;
(ii) a balance sheet as of December 31, 1993, and a related statement of
income for the 11 month period ended December 31, 1993, (collectively the
"Financial Statements"). Such Financial Statements have been prepared in
accordance with generally accepted accounting principles, and fairly present
in all material respects the financial position and results of operations of
the Seller and the Business as of the dates thereof, except that the
financial statements do not contain all of the footnotes required by
generally accepted accounting principles are subject to year-end adjustments
and are not necessarily indicative of the results to be expected for the year
ending December 31, 1993. There has been no material adverse change in the
general affairs, management, financial position, stockholders' equity or
results of operations of the Seller and the Business since December 31, 1993,
nor, to Seller's knowledge, has there occurred any event or condition that
might reasonably be expected to result in the future in such a material
adverse change. Purchaser agrees that Purchaser has not relied on any
financial forecast or projections provided to Purchaser by Seller, or
Seller's officers, directors or employees.
7.5. Actions After the Financial Statements. Except as set forth on
Schedule 7.5, since December 31, 1993, Seller has not, with respect to the
Assets or the Business (i)discharged or satisfied any lien or encumbrance,
other than in the ordinary course of business, (ii) mortgaged, pledged or
subjected to lien, charge or other encumbrance any Assets, other than in the
ordinary course of business, (iii)sold or transferred any Assets or canceled
or forgiven any debts or claims other than in the ordinary course of
business, (iv)waived any rights to receive financial compensation or other
income, other than in the ordinary course of business, (v)changed any
accounting methods or practices, (vi)granted to any officer or employee any
increase in compensation in excess of the amounts thereof in effect as of
December 31, 1993, or any severance or termination pay, or entered into any
employment agreement with any officer or employee, (vii)adopted or amended
any collective bargaining, bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation or other plan, agreement, trust,
fund or arrangement for the benefit of employees, (viii)suffered any material
damage, destruction or loss (whether or not covered by insurance),
(ix)entered into any transactions (including the making of loans) other than
in the ordinary course of its business and other than transactions
contemplated by this Agreement, (x)amended, modified, extended or terminated
any agreement to which Seller is a party, written or oral which is material
to the operation of the Business, or (xi)entered into any agreement to do any
of the things prohibited by clauses(i) through (x) above.
7.6. No Undisclosed Liabilities. As of December 31, 1993, Seller had no
material obligations or liabilities of any nature, whether absolute, accrued,
fixed, to its knowledge, contingent or otherwise, whether due or to become
due with respect to or in connection with the Business, except and to the
extent disclosed in the Financial Statements. Since December 31, 1993, Seller
has not incurred or become subject to any material liabilities, debts or
obligations of any nature (regardless of when they arose) whether absolute,
accrued, to its knowledge, contingent or otherwise, whether due or to become
due, other than those arising in the ordinary -course of business or
resulting from transactions contemplated by this Agreement.
7.7. Taxes. Seller has filed all material federal, state, county and
local income, withholding, social security, unemployment, payroll, excise, ad
valorem, sales, use, franchise, license and other tax returns which at any
time were required to be filed by Seller in connection with the Business and
such returns were true, accurate, correct and complete, in all material
respects, when filed, and nothing has come to the attention of Seller which
would indicate that any such returns are not now true, accurate, correct or
complete. Seller has paid all taxes, licenses, assessments, fees, penalties,
interest and other governmental charges and assessments which have become due
prior to Closing, or are required to have been deposited pursuant to such
returns or otherwise, or pursuant to any assessments against and received by
Seller with respect to the Assets or the Excluded Assets. Neither the Seller
nor any predecessor to the Seller has waived any statute of limitation in
connection with, or granted any extension of a period for assessment of any
such taxes, licenses, assessments, fees, penalties, interest or other
governmental charges and assessments. No federal, state or local tax
elections have been made other than as specifically reflected on the
Financial Statements.
7.8. Governmental Regulation and Compliance With Law.
(a) Seller has neither received nor failed to comply with any notice
of violation of any applicable zoning, employee safety (including
OSHA), environmental, toxic substance, hazardous waste or other
statute, law, ordinance, rule, regulation or order relating to the
Business or the facilities used in connection with the conduct of
the Business, the Assets or otherwise. To Seller's knowledge,
there is presently no such violation or grounds therefor which
would materially adversely affect the continued operation of the
Business or the Assets or the Facilities of the Business. Seller
is not in material violation of any law, regulation, ordinance or
rule applicable to it or the Business. All permits, concessions,
grants, franchises, licenses and other governmental authorizations
and approvals material to the conduct of the Business have been
duly obtained and are in full force and effect, and, to Seller's
knowledge, there are no proceedings pending or threatened that may
result in a revocation, cancellation or suspension or any adverse
modification, of any thereof.
(b) Except as disclosed on Schedule 7.8: (a) Neither the Business or
operation of the Business nor any of the Assets or Real Property
as currently used violate, in any material respect, any applicable
Environmental law in effect as of the date hereof
and, to Seller's knowledge, no condition or event has occurred
which, with notice or the passage of time or both, would
constitute a material violation of any such law; (b) the Seller
has not stored or used any pollutants, contaminants or hazardous
or toxic wastes, substances or materials on or at the Real
Property, except for inventories of chemicals which are to be used
in the ordinary course of the conduct of the Business (which
inventories has been stored or used in accordance with all
applicable Environmental permits and all Environmental Laws); (c)
neither the Seller nor any of its Affiliates has received any
notice from any Governmental Authority or private entity advising
it that the Real Property or the operation of the Business is in
violation of any Environmental Law or any applicable Environmental
Permit or that any of them is responsible (or potentially
responsible) for the cleanup of any pollutants, contaminants or
hazardous or toxic wastes, substances or materials at, on or
beneath the Real Property or at, on or beneath any land adjacent
thereto or in connection with any Waste or Contamination Site; (d)
neither the Seller nor the operation of the Business is the
subject of Federal, state, local or private litigation or
proceedings involving a demand for damages or other potential
liability with respect to violations of Environmental Laws; (e)
the Seller has not buried, dumped, disposed, spilled or released
any pollutants, contaminants or hazardous or toxic wastes,
substances or materials on, beneath or about the Real Property or
any property adjacent thereto; and (f) no byproducts of any
manufacturing process or operation of the Business which may
constitute pollutants, contaminants or hazardous or toxic wastes,
substances or materials under any Environmental Law are currently
stored or otherwise located at the Real Property. The Seller has
timely filed all reports required to be filed under any applicable
Environmental Laws with respect to the Real Property and the
operation of the Business, and has generated and maintained all
required data, documentation and records, under any applicable
Environmental Laws with respect thereto.
7.9. Employee Benefit Plans.
(a) Employment Policies and Benefit Plans. Attached hereto as
Schedule 7.9 is a complete and accurate list of all written plans,
programs, practices, policies and other individual and group
arrangements and agreements of any kind or description (including
any multi-employer plans) of Seller with respect to the Business
or its employees which provide or describe (i)the employment and
payroll policies and practices for employees and officers of the
Business, including any affirmative action plans or programs,
(ii)current and deferred compensation, commission, reimbursement,
severance, vacation, stock purchase, stock option, bonus and
incentive compensation benefits for employees, officers,
directors, agents and independent contractors of the Business and
(iii)the medical, hospital, life, health, accident, disability,
death and other fringe and welfare benefits for employees,
officers, directors, agents and independent contractors of the
Business, including any split-dollar life insurance policies. All
of such plans,
programs, practices, policies and other individual and group
arrangements and agreements and any trust, custodial, investment,
indemnification or other arrangements, oral or written, which are
a part of, or which are entered into by Seller as a result of,
such plans, programs, practices, policies and other individual and
group arrangements and agreements are referred to hereinafter as
"Benefit Programs." In addition, all written reimbursement,
compensation, commission, trust, fringe benefit, payroll or
employment practices, procedures, policies or agreements of any
kind or description of the Business (hereinafter referred to as
"Employment Policies") are described fully and accurately on
Schedule 7.9. Except as listed or described on Schedule 7.9,
there are no Employment Policies or Benefit Programs relating to
employees, directors, agents and independent contractors of the
Business.
(b) ERISA and Code. Except as set out on Schedule 7.9, Seller does not
have a profit sharing, pension plan, or any other Benefit Programs
or Employment Policies subject to regulation under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). To
Seller's knowledge there are no violations of ERISA under such
Benefit Programs or Employment Policies or under any other
employee benefit plans. No such Benefit Programs or Employee
Policies, nor any trustee or administrator thereof, has engaged in
any transaction or practice that would subject the Purchaser to a
tax or penalty under ERISA or the Internal Revenue Code of 1986,
as amended (the "Code") as a result of such transaction or
practice. There have been no withdrawals from any multi-employer
pension plan which would subject the Business or the Assets to
withdrawal liability (as defined in ERISA or the Code).
7.10. [Reserved]
7.11. Collective Bargaining Agreements. None of the employees of the
Seller are members of a union, and Seller is not a party to any collective
bargaining agreement. Within the past three (3) years, Seller has not been
the subject of any union activity or labor dispute, nor has there been any
strike of any kind called, or threatened against Seller in any way effecting
the operation of the Business; and Seller has not violated any applicable
federal or state law or regulation relating to labor or labor practices with
respect to the Business. To Seller's knowledge, Seller is not subject to any
efforts by any union or other labor group to establish or organize a union or
other collective bargaining group.
7.12. Legal and Governmental Proceedings Except as set forth on Schedule
7.12, there is no action, suit, investigation or proceeding pending or, to
the best of Seller's and Shareholder's knowledge, threatened, against Seller
or its officers, directors or Shareholders, with respect to the Shareholders
individually, or the Business or the Assets or of which the Business or the
Assets are subject. Schedule 7.12 comprises an accurate list of the name of
the court or agency in which any such proceeding is pending, the date
instituted, the principal parties thereto, a description of the factual basis
alleged to underlie the proceeding and the relief sought.
7.13. Accounts Receivable. All Accounts Receivable reflected on the
Financial Statements represent sales actually made or services actually
performed in the ordinary course of business in bona fide transactions
completed in accordance with the terms and provisions contained in the
documents related thereto. Except as set out on Schedule 7.13 which provides
for an age listing of Accounts Receivable, as of the closing date, all
Accounts Receivable will be collected in full. Furthermore, except as set out
on Schedule 7.13, there are no setoffs, counterclaims and disputes asserted
against, and no discounts or allowances from, the Accounts Receivable as of
the closing date. As provided on Schedule 7.13, the Seller shall assign all
net receivables through December 31, 1993 to Xxxxxx Xxxxxxx and X.X.
Xxxxxxxxxx Xxxxxxx, collectively, including but not limited to: (a) all
invoiced but uncollected amounts of existing purchaser customer accounts
receivable as of December 31, 1993 for work performed prior to such date; (b)
all non-invoiced remaining, license and installation fees owed by G.E.
Capital pursuant to written contracts; and (c) the SPA deferral license fee
(including interest) as stated in the SPA Agreement referenced on Schedule
7.13. The Purchaser will use reasonable best efforts to assist Xxx Xxxxxxx
and X.X. Xxxxxxxxxx Xxxxxxx in the collection of such amounts, so long as
such efforts do not detract from ongoing Business.
7.14. Customers and Prospects. The customers and identified, material
prospects of the Seller and any compensation or arrangements with respect
thereto, are set out on Schedule 7.14 attached hereto.
7.15. Intellectual Property. Schedule 7.15 contains a true and accurate
list of all material Intellectual Property used in the Business of the
Seller. To Seller's knowledge, no Intellectual Property infringes upon or
conflicts with any rights claimed therein by third parties. Other than as
described on Schedule 7.15, Seller and Shareholders do not manufacture or
sell products or services which are the subject of patents, patent
applications, copyrights, copyright applications, trademarks, trademark
applications, trade styles, service marks, or trade secrets owned by or
licensed to third parties. Seller has not received notice that the
manufacture, use or sale by Seller of its products or services violates or
infringes upon any claims of any United States or foreign patent or patent
application owned or licensed or held by any third party. Except as set on
Schedule 7.15, the Seller and Shareholders have not granted any person, firm
or corporation the right to use such Intellectual Property.
7.16. Disclosure. No covenant, representation or warranty made by Seller
or Shareholder in this Agreement knowingly contains or will contain any
untrue statement of a material fact, or omits or will omit to state a
material fact, necessary to make the statements contained herein or therein
not misleading. The information provided and to be provided by Seller or
Shareholders to Purchaser in this Agreement or in the Schedules or Exhibits
or in any other statement, certificate or writing delivered to Purchaser by
Seller or Shareholders, does not and will not knowingly contain any untrue
statement of a material fact, or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and facts
contained herein or therein, in light of the circumstances in which they are
made, not false or misleading. Copies of all
documents heretofore or hereafter delivered or made available to Purchaser
were or will be complete and accurate copies of such documents.
7.17. Adequacy of Assets Purchased. The Assets purchased by Purchaser
include all rights, properties, interest in properties and assets (except for
Excluded Assets) necessary for Purchaser to carry on the Business of the
Seller as presently conducted by the Seller. The foregoing notwithstanding,
Purchaser hereby acknowledges termination of that Heads of Agreement dated
December 1, 1992, by and between Seller, Shareholders and CCN Management
Systems, Inc. ("Heads of Agreement") and further acknowledges that Seller
no longer has any rights pursuant to the Heads of Agreement.
8. COVENANTS OF SELLER. Seller and Shareholders hereby, jointly and
severally, covenant and agree as follows:
8.1. Best Efforts to Effect Closing. From and after the date of this
Agreement and prior to the Closing Date, Seller will promptly advise
Purchaser in writing of any material change in the general affairs,
management, financial position, or results of operations of the Business, and
Seller will:
(a) carry on the Business in, and only in, the usual, regular and
ordinary course in substantially the same manner as heretofore and
use all reasonable efforts to preserve intact its present business
organization, keep available the services of its present officers,
employees and independent contractors, and preserve its
relationship with others having business dealings with it to the
end that its good will and going business shall be unimpaired at
the Closing Date;
(b) maintain all of its structures, equipment and other tangible
personal property as it now exists, normal wear and tear excepted;
(c) keep in full force and effect insurance comparable in amount and
scope of coverage to insurance now carried by it;
(d) perform, in all material respects, all of its respective obligations
under agreements, contracts and instruments relating to or
effecting its properties, assets and businesses including but not
limited to the Business and the Assets;
(e) maintain its books of account and records in an accurate and
complete manner consistent with prior practice;
(f) comply in the same manner as heretofore with all statutes, laws,
ordinances, rules and regulations applicable to it and to the
conduct of its Business;
(g) not create, incur, assume, guarantee or otherwise become liable with
respect to any indebtedness with respect to the Business or the
Assets, without the prior consent of the Purchaser;
(h) not amend its Articles of Incorporation or Bylaws in any manner
affecting the Business or Assets;
(i) not make any material expenditures, additions or capital
improvements with respect to the Assets or the Business without
the prior written consent of the Purchaser;
(j) not take, or permit to be taken, any action, which is represented
and warranted in clauses (i) through (xi) of Section 7.5 hereof
not to have been taken since December 31, 1992;
(k) not modify any real property lease to which it is a party, or sell,
refinance or accept payment with respect to any Asset or the
Business, or modify, alter or extend any real or personal property
lease to which Seller is a party, or make any acquisition by means
of a merger or otherwise, or a material amount of assets of
securities, or enter into an agreement for any sale, lease,
encumbrance or other disposition of a material amount of assets or
securities, or enter into any material contract or give any
release or relinquishment of any material contract rights;
(1) obtain Purchaser's prior written consent before engaging in any
activity beyond the regular and ordinary course of the Business;
(m) at Purchaser's expense, give to Purchaser and its representatives
full access to its properties, books, records, contracts,
commitments and all such information and documents relating to the
Assets and the Business, as Purchaser may from time to time
reasonably request, permit Purchaser to make such inspections as
it may reasonably require, and cause its officers and employees to
assist Purchaser with gaining access to and understanding such
financial and operating data and other information with respect to
the Assets and the Business as the Purchaser may from time to time
request.
8.2. Legal Opinion. Seller shall cause counsel engaged by it to execute
and deliver at Closing an opinion in the form attached hereto as Exhibit 5.
8.3. Transfer of Assets. At Closing, Seller agrees to transfer the
Assets to Purchaser free and clear of all liens, claims, encumbrances,
security interests or restrictions of any kind except as set forth on
Schedule 7.2, and to execute and deliver to Purchaser documents of
conveyance, including, but not limited to, bills of sale, assignments,
consents, registrations and general warranty deeds, in form reasonably
requested by Purchaser.
8.4. Release of Liens, Claims, Encumbrances, etc. At closing, Seller shall
provide to Purchaser, in form reasonably satisfactory to Purchaser's counsel,
written documents fully releasing and terminating the rights of any and al
persons or entities having any claim, right, lien, security interest or
encumbrance in or to any of the Assets excepting only those items representing
claims with respect to liabilities specifically assumed by Purchaser.
8.5. Update of Schedules or Exhibits. Seller agrees that from time to time
and on the Closing Date, Seller shall update all such Schedules or Exhibits to
this Agreement so that each such Schedule or Exhibit is true, complete and
accurate in all material respects at all times and as of the Closing Date, and
Seller shall advise Purchaser promptly of any materially adverse changes in the
financial affairs of Seller or the financial status of the Assets or the
Business.
8.6. Employees of Seller. Purchaser shall extend an offer of employment to
those current full-time employees of the Seller in the Business as set out on
Schedule 8.6 attached hereto on or immediately following the Closing Date.
Seller agrees at all times to encourage all such employees to make application
for and seek employment with Purchaser.
(a) The terms for employment of all employees hired by the Purchaser,
including compensation and other employee benefits, shall be
determined solely by agreement between the Purchaser and each such
employee; provided, however, that each full-time employee who
accepts employment with the Purchaser shall receive a commitment
for a monthly salary as set out on Schedule 8.6 with credit for the
previous term of that full-time employee's employment with the
Seller for the purposes of determining vacation benefits to which
such employee shall be entitled with Purchaser.
(b) Accrued vacation time for all employees showing the total accrued
dollar amount owed to each such employee for accrued vacation shall
be set out on Schedule 8.6. Schedule 8.6 shall be certified by the
chief executive officer or chief financial officer of Seller.
(c) Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxxx Xxx and Xxx Xxxxx,
upon acceptance of employment offers by the Purchaser, shall
receive performance review sessions on or before December 31, 1993.
As a part of such performance review sessions, Xxxxxx Xxxxxxx and
President of the Purchaser shall determine bonus payments, if any.
(d) All employees who are offered and accept employment with the Purchaser
shall receive those benefits granted to the current employees of
the Purchaser in accordance with those benefit programs provided by
such Purchaser, from time to time. Such employees, however, shall
receive credit for their prior full-time employment by the Seller.
In addition, Xxxxxx Xxxxxxx, X.X. Xxxxxxxxxx Xxxxxxx, Xxx Xxxxx and
Xxxx Xxxxxxx shall receive credit for time worked for Purchaser's
parent corporation prior to their employment by Seller.
(e) Subject to Purchaser's management discretion and direction, Seller's
employees who accept employment with the Purchaser shall be assigned
to TRAMS or SPA products or services.
(f) X.X. Xxxxxxxxxx Xxxxxxx shall receive a five percent (5%) commission
on gross revenues from those TRAMS sales as set forth on Schedule 8.6
if contracts relating to such transactions are executed within one
hundred eighty (180) days from December 31, 1993. Such commission
shall be paid as revenue is received by Purchaser from such
transaction.
(g) Except as provided above in this Section 8.6, Purchaser shall assume
no responsibility whatsoever for any liabilities or obligations of
Seller with respect to any compensation, benefit programs, or
employment policies or claims of any sort of any current or former
officer, director, employee or consultant who are or were employed
by the Seller or otherwise compensated in connection with the
activities involving the Business and the Assets being purchased,
or to which the Seller is a party or by which Seller otherwise may
have any liability to any such employee.
8.7. Inventory Adjustment. Purchaser and Seller agree that Seller shall
deliver to Purchaser at Closing a list of inventory of Seller, certified by
the chief financial officer of Seller, which specifically shall set forth and
certify the inventory, suitable according to industry standards for sale in
the Business, Seller's actual net costs for such inventory on the date
immediately prior to the Closing Date attached hereto as Schedule 8.7.
8.8. Prepaid Expenses and Deposits. Seller shall deliver to Purchaser at
Closing a list of Seller's prepaid expenses and deposits as set out on
Schedule 8.8 and certified by the Seller's chief financial officer which
specifically shall set forth and certify the amount of all the prepaid expenses
and deposits which are transferred to Purchaser as part of the Assets, and which
shall certify that the amount of all prepaid expenses and deposits represent
sums prepaid or deposited by Seller in connection with Assets transferred by
Seller to Purchaser. Seller shall further certify that Purchaser shall have
acquired all right, title and interest in and to such prepaid expenses and
deposits, that there exists no default by Seller with respect to any of the
contracts or agreements related to such prepaid expenses or deposits, and that
no person holding any such prepaid expenses or deposits shall have indicated any
reason to claim or retain such deposits, or indicated that they are not
obligated to provide the materials or services contracted.
8.9. Sales Tax. Seller agrees to provide to Purchaser at Closing any
requested certificates, including without limitation certificates of the
State of Florida, if available, certifying that Seller has paid all sales and
use taxes at any time due by Seller to such State, (provided, however, Seller's
inability to obtain any of such certificates shall not release Purchaser from
its obligations to close, Purchaser acknowledging and agreeing that such
certificates are not a condition to Closing) and Seller agrees to file all
applicable sales and use
tax returns with respect to the period ending on the Closing Date within
fifteen (15) days following the Closing.
8.10. Intellectual Property. At Closing, Seller shall convey, assign, and
register in the U.S. Patent and Trademark Office, or cause to be assigned and
conveyed and registered in the U.S. Patent and Trademark Office, to Purchaser,
by documents or instruments in form satisfactory to counsel for the Purchaser,
all of its rights to and in, and recognize in the Purchaser, as between Seller,
Seller's Shareholders and Purchaser, the exclusive perpetual right and license
to conduct its business operations under the Intellectual Property, including
but not limited to, trademarks or trade names and any other names or
combinations thereof substantially similar thereto. Promptly upon Purchaser's
request, Seller and Shareholders shall change or cause to be changed the
registered corporate name, trade name, assumed name, trademarks, logos, trade
styles of the Seller and any other entities having similar or confusingly
similar names, assumed names, trade styles, logos or marks and no longer use
such Intellectual Property anywhere in the United States. Purchaser, pursuant
to this transfer of Intellectual property shall hold, as between Seller,
Seller's Shareholders and Purchaser, perpetual right and license to use all
Intellectual Property, copyrights, logos, trade styles, labels and other
advertising media or devices which have been adopted or used by Seller or
Shareholders solely in connection with the marketing or sale of the services
and/or products of the Business.
Seller and Shareholders acknowledge and agree that neither will have
the right to and covenant that neither shall, either directly or through any
business association or entity controlled by either party or under common
control, in any way make any reference, orally or in writing, to the
Intellectual Property, including but not limited to trademarks or trade names,
or any combination thereof, or similar or confusingly similar name, in any
manner whatsoever, in connection with the solicitation of business.
8.11. Banking Relationships. Seller shall deliver to Purchaser at Closing
a list of Seller's banking relationships as set out on Schedule 8.11 certified
by the chief financial officer of the Seller which shall specifically set
forth as of the Closing Date account numbers and amounts on deposit, credit
cards and outstanding balances, or other banking relationships which are
transferred to the Purchaser as part of the Assets, and which shall certify that
the amount of all such deposits represents sums deposited under the account of
the Seller in connection with the Assets transferred by Seller to Purchaser.
8.12. Additional Provisions with respect to Xxxxxx Xxxxxxx and
X.X. Xxxxxxxxxx Xxxxxxx.
(a) Xxxxxx Xxxxxxx and X.X. Xxxxxxxxxx Xxxxxxx shall be entitled to
participate in any stock or stock option plan granted to key
personnel of the Purchaser in accordance with such terms and
conditions as approved by the Board of Directors of the Purchaser
from time to time.
(b) Xxxxxx Xxxxxxx shall receive a salary calculated on an annual basis
that is equal to One Hundred Thousand and No/100 Dollars ($100,000.00)
and serve as the Chief Technical Officer of the Purchaser.
(c) X.X. Xxxxxxxxxx Xxxxxxx shall receive a salary that will be calculated
on an annual basis and is equal to Eighty Thousand and No/100
Dollars ($80,000.00) and shall serve in connection with marketing
and sale support as agreed from time to time with the chief
executive officer of CCS Technology Group, Inc.
(d) The terms and conditions of employment of Xxxxxx Xxxxxxx and X.X.
Xxxxxxxxxx Xxxxxxx shall be subject to the direction, from time to
time, of the president of the Purchaser or its board of directors.
Duties for Xxxxxx Xxxxxxx and X.X. Xxxxxxxxxx Xxxxxxx shall be
substantially similar to those undertaken by such individuals on
behalf of the Seller as of December 31, 1993, subject to the
discretion and direction, from time to time, of the president or the
board of directors of the Purchaser.
(c) The parties hereto acknowledge that nothing in this Agreement,
particularly Sections 8.6 and 8.12 hereof, constitutes or is
intended to constitute an employment agreement or a promise of
employment between the Purchaser or its affiliates and the
employees of the Seller, including but not limited to, the
Shareholders. Furthermore, the parties acknowledge that
notwithstanding the terms of this Agreement or any related
documents, or the past practices or agreements of the Seller, the
Shareholders or the Purchaser, that all employment extended by the
Purchaser to employees of the Seller, including but not limited to,
the Shareholders, is on a terminable at will basis, for cause or no
cause at all, and that all compensation of continuing employees,
including but not limited to, the Shareholders, may be adjusted up
or down at the discretion of the chief executive or board of
directors of the Purchaser.
9. COVENANTS OF PURCHASER
9.1. Tender of Purchase Price. At Closing, Purchaser agrees to tender the
Purchase Price as provided in Section 5.1 above.
9.2. Legal Opinion. Purchaser shall cause counsel engaged by it to execute
and deliver at Closing an opinion in the form attached hereto as Exhibit 6.
9.3. [Reserved]
9.4. TRAMS Product Marketing and Customer Support. Subject to the
discretion of the president and board of directors of the Purchaser, the TRAMS
product will be marketed as a
stand alone product as well as in combination with new or existing products of
the Purchaser. In addition, subject to the discretion and direction of the
president and board of directors of the Purchaser, the Purchaser will honor
those previous commitments by the Seller to the existing client base as set out
on Schedule 9.4, including hourly rates for consulting services.
9.5. Office Expenses. Purchaser shall assume and pay for all office
expenses of the Seller as of December 1, 1993, including without limitation, for
rent, telephone, maintenance, communication costs as set on Schedule 9.5
attached hereto.
10. MUTUAL COVENANTS.
10.1. Confidentiality. Purchaser and Seller each agree to refrain from
releasing or disclosing any information, regarding this Agreement or any of the
transactions contemplated hereby (including without limitation purchase price
information) without the prior consent of the other party. In the event the
transactions contemplated hereby are not consummated on or before the Closing
Date, both Purchaser and Seller agree to return to the other all written
material furnished to them by such other party.
10.2. Bulk Sales Compliance and Indemnification. The parties hereto agree
to waive the provisions of that certain law known as the "Uniform Commercial
Code - Bulk Transfers," (Article 6 of the U.C.C. as adopted by the State of
Florida), to the extent applicable, and Seller and Shareholders, jointly and
severally, agree to indemnify and hold Purchaser harmless with respect to any
claims, liabilities, actions, causes of action incurred to or alleged by any
creditor of the Seller with respect to which Purchaser would have been protected
had such provisions of the "Uniform Commercial Code - Bulk Transfers" law been
fully complied with.
10.3. Required Consents. Prior to Closing, Purchaser and Seller agree to
cooperate with each other and exercise best efforts to obtain all consents or
assignments necessary to consummate the transactions contemplated by this
Agreement required by governmental authorities, lessors, lenders, partners or
otherwise, including without limitation those consents listed and described on
Schedule 10.3. It is understood and agreed that Seller shall engage in the
principal efforts to seek all such consents, but Purchaser agrees to fully
cooperate with Seller or its designee and their agents in Seller's efforts to
obtain all necessary approvals, consents or assignments, including but not
limited to consents or assignments of any lenders, lessors, or landlords set out
on Schedule 10.3.
10.4. Further Assurances. From time to time after the Closing, (i)at
Seller's own expense, Seller and Shareholders will each use its best efforts to
execute and deliver such other instruments of conveyance, assignment, transfer
and delivery and will take such other actions as Purchaser reasonably requests
in order to more effectively transfer, convey, assign and deliver to Purchaser,
and to place in possession and control of, any of the Assets, or to enable
Purchaser to exercise and enjoy all rights and benefits of Seller with respect
thereto; and (ii)at its expense, Purchaser will execute and deliver instruments
of assumption and will otherwise use its best
efforts to take such actions as Seller reasonably requests in order to assure
the assumption by Purchaser of the liabilities set forth in Exhibit 3.
11. CLOSING CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to consummate the Closing hereunder shall be subject, in its sole
discretion, to the satisfaction at or prior to Closing of each of the following
conditions any one or more of which Purchaser, in its sole discretion, may
waive:
11.1. Representations and Warranties; Covenants, Agreements and Conditions.
All the representations and warranties of Seller and Shareholders
contained in this Agreement and in any certificates, Schedules or Exhibits
delivered pursuant hereto shall be true and correct in all material respects as
if made at and as of the Closing Date. Seller and Shareholders shall have
performed and complied with in all material respects all covenants, agreements
and conditions required by this Agreement to be performed or complied with by
Seller or Shareholders prior to or at the Closing Date.
11.2. Required Consents or Assignments. All consents, approvals,
assignments, -registrations of each person or entity whose consent, approval,
assignment or registration is necessary to consummate the transactions
contemplated in this Agreement, including, without limitation, those listed on
Schedule 10.3 shall have been obtained.
11.3. Transfer of Assets. At Closing, Seller, shall: (i) deliver to
Purchaser such general deeds, bills of sale, endorsements, assignments,
registrations and other sufficient instruments of conveyance and assignment, in
form satisfactory to Purchaser and its counsel, as shall be effective to
transfer such Assets to Purchaser and to vest in the Purchaser all right, title
and interest in and to the Assets, and (ii)deliver to Purchaser all of Seller's
contracts and commitments, books, records and other data relating to the Assets
in the Business. Simultaneously with such delivery, Seller shall take all of the
additional steps as may be necessary to put Purchaser in possession of the
operating control of the Assets and the Business, and Purchaser shall take all
such additional steps as may be necessary for it to assume the liabilities set
out in Exhibit 3.
11.4. Release of Liens, Claims, Encumbrances, Etc. Seller and Shareholder
shall provide to Purchaser, in form satisfactory to Purchaser's counsel, written
documents fully releasing and terminating the rights of any and all persons or
entities having any claim, right, lien, security interest or encumbrance in or
to any of the Assets which are not assumed pursuant to Exhibit 3.
11.5. Compliance With Law; No Litigation. Seller shall have provided to
Purchaser evidence, satisfactory to Purchaser's counsel, of compliance in full
with all applicable laws. Except as set out in Schedule 11.5, no action, suit or
other proceeding shall be pending before any court, tribunal or governmental
authority seeking or threatening to restrain or prohibit the
consummation of the transactions contemplated by this Agreement, or seeking to
obtain substantial damages or allocations in respect thereof, or involving a
claim that consummation thereof would result in violation of any law, decree or
regulation of any governmental authority having appropriate jurisdiction.
11.6. No Material Adverse Change. There shall have been no material adverse
change since December 31, 1992, in the financial condition or results of
operations of the Business, except such changes contemplated, permitted or
required by this Agreement.
11.7. Due Diligence. Upon execution of this Agreement by both parties,
Purchaser and/or its agents and representatives will be afforded complete access
to the employees, agents, representatives, files, customers, supplies, documents
and financial books and records of the Seller in connection with the Business
and the Assets for the purpose of engaging in a detailed investigation of the
Business, the Assets and the financial position of the Seller (the
"Inspection"). Closing, pursuant to Section 4 of this Agreement, shall only
occur upon the complete and sole satisfaction of the Purchaser as to the results
of the Inspection; provided however, nothing herein is intended to extend or
shall be construed to extend the date by which the Closing is to occur as
provided in Section 4 of this Agreement. All costs of Inspection shall be borne
by the Purchaser.
11.8. Financial Statements. If the Financial Statements are not audited by
a firm of independent certified public accountants acceptable to Purchaser,
then Purchaser shall have determined to its satisfaction, upon counsel with its
independent certified public accountants, that the Financial Statements for the
period ended December 31, 1992 and December 31, 1993, shall be auditable in
accordance with generally accepted auditing standards such that Purchaser's
accountants shall be able to perform all procedures and do all things necessary
and appropriate to issue its standard audit opinion thereon. Seller and
Shareholders agree to cooperate in all respects with Purchaser and its
accountants to perform and finalize the audit on such Financial Statements,
including without limitation, to sign and deliver management's representation
letters with respect to such Financial Statements.
11.9. Other Agreements. Purchaser shall have obtained and delivered all
other agreements, documents, certificates, or registrations required or
necessary pursuant to this Agreement.
12. CLOSING CONDITIONS TO OBLIGATIONS OF SELLER AND SHAREHOLDER. The
obligations of Seller and Shareholders to consummate the Closing shall be
subject, in the sole discretion of each of them, to the satisfaction at or
prior to Closing of the condition that all of the representations and warranties
of Purchaser contained in this Agreement shall be true and correct in all
respects as if made at and as of the Closing Date, and Purchaser shall have
performed and complied with in all respects all covenants and conditions
required by this Agreement to be performed or complied with by it prior to or at
the Closing Date.
13. CLOSING CONDITIONS TO OBLIGATIONS OF PURCHASER, SELLER AND SHAREHOLDER. The
obligations of Purchaser, Seller and Shareholder hereunder shall be subject, at
the option of any one of them, in its, his, or her discretion, to the following
conditions:
13.1. Injunction. There shall not be pending or threatened any proceeding
before any agency, court, commission or tribunal seeking to enjoin or prevent
the transactions contemplated by this Agreement.
13.2. Illegality. No United States statute, rule, regulation, executive
order, decree or injunction shall have been enacted, entered, promulgated or
enforced by any court or government authority which is in effect and has the
effect of making the purchase of the Assets illegal or otherwise prohibiting the
consummation of the transactions contemplated hereby.
14. INDEMNIFICATION AND OFFSET.
14.1. Seller's Indemnification. Seller and Shareholders, jointly and
severally, agree from and after the Closing Date, to indemnify, defend and hold
harmless Purchaser and Purchaser's officers, partners, employees and agents
from any loss, damage, expense, liability claim or controversy, including
without limitation attorneys' fees, expenses of litigation and any and all
commissions, fees or payments owing to any broker who represented Seller or
Shareholders, to which Purchaser or any of Purchaser's officers, partners,
employees or agents may become subject arising out of any one or more of the
following:
(i) any inaccuracy or breach of any representation, warranty or
covenant of Seller or Shareholders contained in this Agreement
(but not otherwise); or
(ii) any person asserting any claim against Purchaser to any rights in
and to the Assets following the Closing Date to the extent that
such claim arises or is alleged to arise by, through or under
Seller or Shareholder (but not otherwise), including without
limitation claims to ownership of a security interest in or to
any of the Assets; or
(iii) any obligation or liability of Seller or Shareholders not
expressly assumed by Purchaser pursuant to this Agreement whether
or not such obligation or liability is fixed or contingent, or
liquidated or unliquidated, and whether or not such liability or
obligation was known to Seller or its officers, directors or
Shareholders on the Closing Date; or
(iv) any claim, action, suit or investigation (collectively "Claims")
which is made, threatened or asserted on or after the Closing Date
against the Purchaser with respect to acts or omissions of Seller
or its officers, directors or shareholders, employees,
contractors, or agents occurring before or on the Closing Date; or
(v) any liability of Seller for any and all taxes for any period
ending on or before the Closing Date with respect to any item or
matter occurring prior to the Closing Date.
14.2. Purchaser's Indemnification. Purchaser agrees from and after the date
hereof to indemnify, defend and hold harmless Seller and Seller's officers,
directors, shareholders, employees and agents from any loss, damage, expense,
liability claim or controversy, including, without limitation, attorneys' fees,
expenses of litigation and any and all commissions, fees or payments owing to
any broker who represented or claims to have represented Purchaser, to which
Seller or any of Seller's officers, directors, shareholders, employees or agents
may become subject arising out of any one or more of the following:
(i) any inaccuracy or breach of the representation, warranty or
covenant of Purchaser contained in this Agreement
(but not otherwise); or
(ii) any obligation or liability arising from and after the Closing
Date which is expressly assumed by Purchaser pursuant to this Agreement; or
(iii) any claim, action, suit, investigation or proceeding
(collectively "Claims") which is pending, threatened or asserted
after the Closing Date against Seller with respect to the acts or
omissions of Purchaser or its officers, partners or employees,
contractors or agents occurring after the Closing Date.
14.3. Limitation of Liability. In no event shall the liability of the
Shareholders or Seller, or both, pursuant to this Section 14 exceed a total of
$500,000.
14.4. Independence. The Purchaser shall be or shall establish a wholly-
owned subsidiary corporation of CCS Technology Group, Inc. pursuant to which
the current business of the Seller shall be undertaken. Such entity shall serve
as its own profit center. The Purchaser and CCS Technology Group, Inc. make no
representations as to the future profitability of such entity or the provision
of assets or assistance.
15. BROKERAGE. Except as set out on Schedule 15 attached hereto, each of the
parties to this Agreement represent and warrant to the others that all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried on by them individually, by their counsel or by officers of
them directly with the other parties individually or with officers of or counsel
for the other party, and further represent and warrant that they have not dealt
with or employed any broker, finder or financial adviser in connection with or
on account of this Agreement or any transaction herein contemplated and, insofar
as they have knowledge, no broker, finder or financial adviser is entitled to
any commission or broker's, finder's or adviser's fee in connection with any of
these transactions.
16. NOTICES. All notices, consents, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
delivered if (i) delivered personally; or (ii) five days after mailed by
certified mail, return receipt requested, with proper postage prepaid; or
(iii) delivered by facsimile; or (iv) delivered by recognized courier
contracting for same day or next day delivery:
(a) To Purchaser:
CCS Technology Group, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn.: President
Facsimile Number: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx
0000 Xxxxxxxxx Xxxx, X. X.
0000 Xxxxxxx Financial Center
Xxxxxxx, XX 00000
Attn.: Xxxx X. Xxxxx, Esq.
Facsimile Number: (000) 000-0000
(b) To Seller:
TranSys Corporation
Suite 2001
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Attn.: Xxxxxx Xxxxxxx
Facsimile Number: (000) 000-0000
With a copy to:
Boroughs, Xxxxx & Xxxxxxx
000 Xxxx Xxxx Xxxxxx
000 Xxxxxxxxx Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx, Esq.
Facsimile Number: (000)000-0000
(c) To Shareholders:
TranSys Corporation
Suite 2001
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Attn.: Xxxxxx Xxxxxxx
X.X. Xxxxxxxxxx Stavros
Facsimile Number: (000) 000-0000
With a copy to:
Boroughs, Xxxxx & Xxxxxxx
000 Xxxx Xxxx Xxxxxx
000 Xxxxxxxxx Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx, Esq.
Facsimile Number: (000) 000-0000
or at such other address as the parties hereto shall have last designated by
notice to the other parties. Any item delivered personally or by recognized
courier contracting for same day or next day delivery shall be deemed delivered
on the date of delivery. Facsimile deliveries shall be deemed delivered on the
date of transmission by the sender provided sender has evidence of successful
transmission and receipt. Any item mailed shall be deemed to have been delivered
on the date evidenced on the return receipt.
17. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement together with the
schedules and exhibits herein referenced together contain the entire agreement
among the parties hereto with respect to the transactions contemplated herein,
and all prior understandings, and agreements and the letter of intent among the
parties hereto are hereby terminated in their entirety and are of no further
force or effect. This Agreement shall not be modified or otherwise amended
except by an instrument in writing signed by or on behalf of the parties hereto.
18. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida.
19. WAIVER. At any time prior to or on the Closing Date any party hereto may
waive in writing compliance with any condition to its obligations hereunder. No
waiver shall be effective unless given in writing. No waiver by any party hereto
of its rights under any provisions of this Agreement shall constitute a waiver
of such party's rights under such provision at any other time or a waiver of
such party's rights under any other provision of this Agreement. No failure by
any party to take any action against any breach of this Agreement or default by
another party hereto shall constitute a waiver of the former party's rights to
enforce any provision of this Agreement or to take action against such breach
or default or any subsequent breach or default by such party.
20. ASSIGNMENT. This Agreement shall not be assignable by any party hereto,
provided that Purchaser may assign this Agreement and its rights hereunder to
any entity controlled by it or which it controls.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. HEADINGS. The section headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereto.
23. EXPENSES. Each party shall bear its own costs and expenses, including but
not limited to fees and expenses of counsel, accountants investment bankers,
bankers and advisors.
24. SURVIVAL. All of the representations, warranties, covenants, agreements
and indemnifications made by Purchaser, Seller and Shareholders in or pursuant
to this Agreement shall survive the Closing for the period beginning on the date
of this Agreement and continuing until two (2) years from the date of this
Agreement.
25. TIME OF ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto duly executed this Agreement under
seal effective as of the date first hereinabove written.
PURCHASER:
----------------------------------
a Florida corporation
By:
-------------------------------
Title:
-----------------------
Attest:
Title:
-----------------------
(CORPORATE SEAL)
SELLER:
TRANSYS CORPORATION,
a Florida corporation
By:
-------------------------------
Title:
-----------------------
Attest:
Title:
-----------------------
(CORPORATE SEAL)
SHAREHOLDERS:
--------------------------------- (SEAL)
Xxxxxx Xxxxxxx
--------------------------------- (SEAL)
X.X. Xxxxxxxxxx Stavros
INDEX TO EXHIBITS AND SCHEDULES
Exhibit Description Item Number
------- ----------- -----------
1 Asset List 1
2 Excluded Assets 2
3 Liabilities to be Assumed 3
4 Allocation of Purchase Price 4
5 Legal Opinions of Seller's Counsel and Shareholders' Counsel 5
6 Legal Opinion of Purchaser's Counsel 6
7 Form of Note 7
Schedule Description Item Number
-------- ----------- -----------
7.2 Permitted Liens, Encumbrances, Etc. 7
7.3(i) Articles of Incorporation; Bylaws; Powers of Attorney 8
7.3(ii) All deeds of title and other title documents 9
pertaining to any real property (including a brief
description of such documents and of the use to which
such property is being employed), any interest
therein, now or previously owned of record or
beneficially by the Seller and used as a part of the
Business, together with copies thereof; and all lease
agreements for all property,real or personal, to
which Seller is a party, including without limitation
lease agreements for all Facilities, together with
complete schedules pertaining thereto listing
individually all such property leased by item.
7.3(iii) All insurance policies currently in force issued to or 10
in favor of Seller covering any or all risks of any
nature whatsoever.
7.3(iv) All loan agreements, notes payable or other debt 11
instruments or obligations issued, guaranteed or
assumed by Seller or for which Seller or the Assets
are otherwise obligated or bound (including any
guaranty or obligation of Shareholder on behalf of
Seller or in connection with the Business or Assets).
7.3(v) All contracts in Seller's possession which pertain in 12
any way to the conduct or operation of the Business,
including without limitation, union agreements, sale
and lease-back agreements, conditional sale
agreements, bids, equipment maintenance agreements,
marketing or advertising agreements, sale or supply
contracts, purchase contracts, joint venture agreements,
license agreements, royalty agreements, secrecy,
confidentiality and non-disclosure agreements,
commission brokerage, agency or similar agreements,
escrow agreements, delivery agreements, shipment
agreements, and any other agreement in Seller's
possession in any way pertaining to the Business.
7.3(vi) All loans or advances (hereinafter "Company Loans") 13
outstanding from Seller to any officer, director,
Shareholder, employee, agent, or independent
contractor of the Business, or to any person related
to any of the foregoing, or to any corporation,
partnership or other entity of which any of the
foregoing possess any interest, such list to state
the amount of the loan, the person or entity obligated
to repay, the interest rate thereon, and the terms of
repayment.
7.3(vii) A summary of the terms of all material oral contracts 14
of which any officer of Seller has knowledge, to the
extent that any such oral contract will be binding
upon the Business following the Closing Date
7.3(viii) All franchise or license agreements held or granted 15
by the Seller or necessary for the operation of the
Business of the Seller.
7.3(ix) All equipment leases held or granted by the Seller 16
or necessary to operate the Business of the Seller.
7.3(x) Defaults 17
7.4 Financial Statements 18
7.5 Actions After December 31, 1992 19
7.8 Environmental Concerns 20
7.9 Benefit Programs, Employment Policies, Etc. 21
7.12 Legal and Governmental Proceedings 22
7.13 Accounts Receivable 23
7.14 Customers and Prospects 24
7.15 Intellectual Property 25
8.6 Employees Salaries, Accrued Vacation 26
8.7 Closing Inventory Amount 27
8.8 Prepaid Expenses and Deposits 28
8.11 Banking Relationships and Accounts 29
9.4 TRAMS Product Marketing and Customer Support 30
9.5 Office Expenses 31
10.3 Consents 32
11.5 Certain Litigation 33
15 Brokers, Etc. 34
