ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of
December 22, 1995, by and among ANALYTICAL SURVEYS,
INC., a Colorado corporation ("Buyer"),
INTELLIGRAPHICS, INC., a Wisconsin corporation
("Seller"), and A. XXXXXXX XXXXXXXX ("Xxxxxxxx").
Certain of the capitalized terms used in this Agreement
are defined as set forth in Paragraph 2.
RECITALS:
A. Buyer desires to purchase from Seller, and
Seller desires to sell to Buyer, substantially all of
the assets of Seller used in the conduct of its data
conversion business (the "Business") in accordance with
the terms and conditions hereinafter set forth.
X. Xxxxxxxx is the majority shareholder of Seller
and will benefit financially from the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the mutual
promises hereinafter contained, and other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree
as follows:
1. Purchase of Assets.
1.1. Assets to be Purchased. Subject to the
terms and conditions set forth in this Agreement, Buyer
hereby agrees to purchase from Seller and Seller hereby
agrees to sell, assign and deliver to Buyer, at
Closing, except for the Excluded Assets (described
below), all of the assets of Seller owned or used in
connection with the Business, as the same may exist as
of the date of Closing, including, but not limited to,
the following:
(a) all Fixed Assets;
(b) all supplies, packaging materials,
marketing and sales literature, consumable
materials and other miscellaneous items of similar
character of Seller on hand as of Closing relating
to the Business, wherever located;
(c) all work in process, unbilled services
and other billable charges of the Business;
(d) the Accounts Receivable;
(e) all sales, manufacturing, supplier and
customer lists and records, personnel and payroll
records, accounting records, purchasing and sale
records, and all other records of the Business
(except Seller's corporate minute and stock books)
and the other business records of Seller listed on
attached Exhibit 1.1(e);
(f) all product specifications, Patents and
Data, Related Information, formulae, designs,
copyright registrations and applications therefor,
whether issued or pending, relating to the
Business and all improvements, and other similar
interests relating to the Business to which Seller
has any right of ownership, use or otherwise;
(g) all of Seller's right, title and
interest in and to the name "Intelligraphics,
Inc.," and "Intelligraphics International, Inc."
or any other name, including any derivations or
abbreviations of any name under which Seller is
now doing or has done business in the past;
(h) all of Seller's right, title and
interest in, to and under the Customer Contracts
and the Leases and those other contracts,
licenses, permits, purchase orders, sales orders,
service contracts and other agreements of the
Business existing as of Closing, including without
limitation, those listed on attached Exhibit
1.1(h) (the "Assumed Contracts");
(i) all Software; and
(j) the goodwill, if any, of the Business.
All of the assets being purchased by Buyer
described in this Paragraph 1.1 are hereinafter
referred to as the "Assets." Buyer acknowledges that
Xxxxxxxx is a partner in both Center City Plaza, a
Wisconsin general partnership, and Center City Leasing
LLC, a Wisconsin limited liability company
(collectively, the "Business Enterprises"), that Seller
leases certain office space and equipment from the
Business Enterprises, and that the Assets shall not
include any assets which are set forth on attached
Exhibit 2.2 (the "Excluded Assets").
1.2. Purchase Price. As consideration for the
Assets, Buyer shall pay to Seller the following (the
"Purchase Price"):
(a) An amount equal to Three Million Four
Hundred Fifty Thousand Dollars ($3,450,000.00)
plus or minus the amount, if any, by which the Net
Current Asset Value (as defined below) exceeds or
is less than, as the case may be, One Million
Dollars ($1,000,000) (the "Cash Payment"); and
(b) Two Hundred Thirty Thousand (230,000)
shares of the Common Stock (subject to the
restrictions contained in the Voting Trust,
Investor Letters, and Lock Up Agreement of even
date herewith), appropriately adjusted for any
stock splits, reverse stock splits, stock
dividends, or other similar events occurring
between the date of this Agreement and the Closing
(the "Subject Shares"). Good and marketable title
to the Subject Shares shall be transferred to
Seller at the Closing, free and clear of all
liens, claims and encumbrances, except the
encumbrances provided for in the terms of this
Agreement or the agreements executed pursuant to
this Agreement.
1.3. Payment of Estimated Cash Payment and the
Subject Shares. At the Closing, Buyer shall:
(a) Pay to Bank One, Milwaukee, N.A. by wire
transfer an amount equal to $3,490,000 (the
"Estimated Amount"), which represents the parties'
estimate of the amount set forth in Paragraph
1.2(a) above (which is $3,507,000), less $17,000
as a "cushion" and less $250,000 (the "Escrowed
Amount"), pursuant to Paragraph 1.3(b) below;
(b) Deliver to the Escrow Agent by wire
transfer the Escrowed Amount and 70,000 of the
Subject Shares both of which shall be held by the
Escrow Agent under the terms of the Escrow
Agreement, as follows:
(i) $170,000 shall be paid by the Escrow
Agent in accordance with the terms of the Escrow
Agreement upon Seller's delivery to the Escrow
Agent, on or before February 28, 1996, of a signed
Consent by Electronic Data Systems, Inc. ("EDS"),
assigning Seller's $5,000,000 Contract with EDS to
Buyer in form and substance satisfactory to Buyer;
(ii) $80,000 shall be paid in accordance
with the terms of the Escrow Agreement by Escrow
Agent upon Buyer's delivery to Escrow Agent of
eight (8) signed Consents, in the form set forth
under Exhibit 1.3(b)(ii). If fewer than eight (8)
signed Consents are delivered by Buyer, Escrow
Agent shall pay $10,000 per signed Consent
delivered on or before February 28, 1996. Any
funds remaining in the Escrowed Amount by reason
of Buyer's failure to deliver the signed Consents
pursuant to (i) and (ii) above shall be paid by
Escrow Agent to Buyer on February 29, 1996.
Seller will cooperate with Buyer's efforts to
obtain the Consents, provided that, direct contact
with the parties to the contracts for which the
Consents are necessary will be limited to Xxxxxxx
Xxxxxxx and Xxxxxx Xxxxxx; and
(iii) the Subject Shares shall be held in
escrow pursuant to the terms of Paragraph 1.8
below.
(c) Deliver to the Trustee under the Voting
Trust, of even date herewith, a certificate, in
the name of the Trustee, for the balance (160,000)
of the Subject Shares, which shares shall be held
by the Trustee under the terms of the Voting
Trust. As provided in the Voting Trust, the
Trustee shall deliver to the Beneficiaries their
respective voting trust certificates.
Prior to Closing, Buyer and Seller and their
respective accounting firms shall use reasonable good
faith efforts to estimate the Net Current Asset Value
and, based upon the estimate of the Net Current Asset
Value, the Cash Payment. For purposes of this
Agreement, the Cash Payment as so estimated shall be
referred to in this Agreement as the "Estimated
Amount."
1.4. Post-Closing Adjustments. As promptly as is
practicable and in any event within sixty (60) days
following the Closing, Seller will prepare and deliver
to Buyer a balance sheet dated as of the Closing Date
(the "Final Balance Sheet") and a statement setting
forth the proposed calculation on the Net Current Asset
Value (the "Statement"), reviewed by BDO Xxxxxxx. The
Final Balance Sheet and Statement shall be prepared in
accordance with GAAP and on a basis consistent with the
audited balance sheet of Seller as at December 31, 1994
and shall be reviewed by BDO Xxxxxxx. Buyer shall
permit Seller and BDO Xxxxxxx access to all of the
accounting records of the Business in Buyer's
possession as may be necessary for the preparation and
certification of such balance sheet and statement.
Seller shall permit Buyer and its independent certified
public accountant to review all accounting records and
all work papers and computations used in the
preparation of the Final Balance Sheet and Statement.
If Buyer does not notify Seller within thirty (30) days
of receiving the Final Balance Sheet and Statement that
Buyer disagrees with the calculation of the Net Current
Asset Value reflected therein, then the Net Current
Asset Value shall be the amount reflected in the
Statement. If Buyer notifies Seller that Buyer
disagrees with such calculation within such thirty (30)
day period, Seller and Buyer shall negotiate in good
faith to resolve the dispute. If, within fifteen (15)
days from the date notice of dispute is given, Seller
and Buyer cannot agree on the resolution of the
dispute, then the dispute shall be resolved a "Big 6"
accounting firm (other than KPMG Peat Marwick) chosen
by Seller and Buyer, provided that, in the event that
Seller and Buyer cannot agree on a firm, Seller and
Buyer will each choose two of the firms referenced
previously in this sentence and a firm will be chosen
from those four by a random draw.
1.5. Payment of Adjustment Amount. If the
adjustment provided in Section 1.2(a) requires a
payment by Buyer to Seller (after taking into account
the cushion provided for in Section 1.3(a), then within
ten (10) days of the final determination of the Net
Current Asset Value, Buyer shall pay to Bank One,
Milwaukee, N.A. an amount equal to such adjustment (the
"Adjustment Amount"); provided, that in no event shall
the Adjustment Amount payable by Buyer exceed $35,000
(taking into account the cushion). If the adjustment
provided for in Section 1.2(a) requires a payment by
Seller to Buyer (after taking into account the
cushion), then within ten (10) days of such final
determination, Seller and Xxxxxxxx, jointly and
severally, shall wire transfer to Buyer an amount equal
to such adjustment.
1.6. Allocation of Purchase Price. The Purchase
Price shall be allocated among the Assets based on
their respective fair market values as set forth on
attached Exhibit 1.6.
1.7. Assumption of Liabilities. As of the
Closing Date, Buyer shall assume and hereby agrees to
pay and perform when due (i) all liabilities which
accrue and which are based on performance obligations
arising from and after the Closing Date under the
Assumed Contracts, and (ii) all current liabilities of
Seller considered in the final calculation of the Net
Current Asset Value, including, without limitation, (a)
trade accounts payable, (b) total payroll taxes and
withholding, (c) accrued wages and salary, (d) accrued
FICA taxes, (e) accrued property taxes, (f) trade
accounts payable to related parties, (g) xxxxxxxx in
excess of costs and estimated earnings, (h)
unemployment compensation taxes, and (i) in addition to
total payroll taxes and withholding, any employee
withheld amounts, in each case as reflected on the
Final Balance Sheet except that Buyer need not assume
any liability reflected on the Final Balance Sheet that
is unliquidated or is not fixed in amount or involves
an obligation other than the payment of money, if
Buyer, on or prior to the date specified in Section 1.5
for the payment of adjustments, identifies such
liability by notice to Seller and pays to Bank One,
Milwaukee, N.A. cash in an amount equal to the amount
of the liability reflected on the Final Balance Sheet.
The liabilities so assumed by Buyer are referred to as
the "Assumed Liabilities." Except for the Assumed
Liabilities, Buyer shall assume no obligations or
liabilities of Seller and Seller covenants and agrees
to pay, perform and discharge all liabilities and
obligations of Seller which are not specifically
assumed by Buyer hereunder.
1.8. Escrow of Subject Shares. Unless a claim is
timely made under the terms of the Escrow Agreement,
the Escrow Agent shall transfer the certificate for the
Subject Shares held under the Escrow Agreement to the
Trustee of the Voting Trust on the first anniversary of
the Closing Date, to be held under the terms of the
Voting Trust. If a claim is timely made under the
Escrow Agreement, the Subject Shares shall be disbursed
in accordance with the terms of the Escrow Agreement.
As provided in the Voting Trust, the Trustee shall
issue voting trust certificates to the Beneficiaries
and Bank One Milwaukee, N.A. for any such Subject
Shares disbursed by the Escrow Agent to the Trustee.
2. Definitions. As used herein, the following
terms shall have the following meanings, respectively:
"Accounts Receivable" shall mean all accounts
receivable of Seller on hand as of the Closing
Date.
"Assets" shall be defined as set forth in
Paragraph 1.1.
"Assumed Contracts" shall be defined as set
forth in Paragraph 1.1(h).
"Assumed Liabilities" shall be defined as set
forth in Paragraph 1.7.
"Audited Financial Statements" shall be
defined as set forth in Paragraph 3.3.
"BDO Xxxxxxx" shall mean the Milwaukee,
Wisconsin office of the independent certified
public accounting firm of BDO Xxxxxxx.
"Beneficiaries" shall be defined as set forth
in the Voting Trust.
"Claiming Party" shall be defined as set
forth in Paragraph 6.3(a).
"Closing" shall be defined as set forth in
Paragraph 11.1.
"Closing Date" shall mean December 22, 1995,
or such other date as may be mutually agreed by
the parties as provided in Paragraph 11.1.
"Code" shall mean the Internal Revenue Code
of 1986, as amended.
"Common Stock" shall mean the authorized no
par value Common Stock of Buyer.
"Customer Contracts" shall mean those written
contracts between Seller and any person, firm or
corporation for the provision by Seller of
products and/or services related to the Business
(i) entered into at or prior to the Closing Date
as to which Seller has not completed performance
as of the Closing Date or (ii) received and to be
completed after the Closing Date, including only
those contracts listed on Exhibit 1.1(h) between
Seller and its customers.
"ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended, and the
rules and regulations promulgated thereunder.
"Escrow Agent" shall mean Xxxx Xxx, Xxxxxxxx,
XX, Xxxxxx, Xxxxxxxx.
"Escrow Agreement" shall mean the Escrow
Agreement in the form attached to this Agreement
as Exhibit 2-1 to be entered into among Buyer,
Seller and the Escrow Agent at the Closing.
"Excluded Assets," if any, shall mean those
assets listed as being specifically excluded on
attached Exhibit 2-2.
"Final Balance Sheet" shall be defined as set
forth in Paragraph 1.4.
"Fixed Assets" shall mean all fixed assets of
Seller on hand as of Closing of every kind and
description, wherever located, including without
limitation, machinery, equipment, hardware,
computers, office equipment, furniture,
furnishings, fixtures, tools, automobiles, trucks,
other vehicles, racks, supplies, leasehold
improvements, and other fixed assets of Seller
utilized in any manner by Seller in connection
with the Business.
"GAAP" shall mean generally accepted
accounting principles consistently applied.
"Indemnifying Party" shall be defined as set
forth in Paragraph 6.3(a).
"Knowledge of Seller" or similar phrases such
as "Seller's Knowledge" or to the "best of
Seller's knowledge" means matters known to any of
Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx and Xxxxx
Xxxxx and matters which would come to any of their
attention in the normal course of due diligence to
verify the warranties and representations set
forth in Paragraph 3.
"Leases" shall mean all of the leases for
equipment and facilities under which Seller is
lessee, utilized by Seller in the Business,
including without limitation, those leases listed
on attached Exhibit 1.1(h).
"Market Price" shall mean the average of the
closing bid and asked prices for the Common Stock
on the applicable date as reported on the National
Market System of NASDAQ (or, if the NASDAQ is
closed on such date, on the next preceding date on
which the NASDAQ is operated).
"NASDAQ" shall mean the National Market
System of the National Association of Securities
Dealers Automated Quotation System.
"Net Current Asset Value" shall mean the sum
of the book value of the trade accounts
receivable, work in progress, unbilled work,
prepaid expenditures and other current assets of
Seller as reflected on the Final Balance Sheet
(excluding any current assets included among the
Excluded Assets), minus the sum of the trade
accounts payable, accrued expenses, xxxxxxxx in
excess of charges, and other current liabilities
of Seller as reflected on the Final Balance Sheet,
in all cases determined in accordance with GAAP.
"Obligations" shall mean all obligations
under the Assumed Contracts and the Assumed
Liabilities.
"Patents and Data" shall mean such of the
following in which Seller has any right, title or
interest: patents or applications for patents
(domestic or foreign) and trade secrets with
respect to such patents or applications for
patents and trade secrets, as well as all
technical know-how and knowledge, discoveries,
inventions, processes, secret processes, machines,
manufacture or compositions of matter or any other
similar information, conversion data, and all
documents pertaining to such patents or
applications for patents and trade secrets
(including both written and oral recordings or
representations).
"Plan" or "Plans" shall be defined as set
forth in Paragraph 3.30.
"Related Information" shall mean such of the
following in which Seller has any right, title or
interest: trademarks, trademark registrations,
applications for trademark registrations, trade
names, copyrights, copyright applications, license
agreements (as licensee), technical reports,
vendor and customer lists, and all other documents
and business records of Seller.
"Required Consents" shall be defined as set
forth in Paragraph 8.7.
"Shareholders" shall mean A. Xxxxxxx
Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxx and Xxxxx
Xxxxxxx.
"Software" shall mean all software in which
Seller or Xxxxxxxx have any rights and which is
utilized by Seller in any manner in the Business,
whether or not said software is fully developed or
in the process of development, and including, but
not limited to, any enhancements or modifications
to said software and all software licenses and all
source codes therefor which may be in Seller's
possession or control.
"Statement" shall be defined as set forth in
Paragraph 1.4.
"Subject Shares" shall be defined as set
forth in Paragraph 1.2(b).
"Trustee" shall be defined as set forth in
Paragraph 11.5.
"Uncollected Receivables" shall be defined as
set forth in Paragraph 7.
"Voting Trust" shall be defined as set forth
in Paragraph 11.5.
3. Representations and Warranties of Seller and
Xxxxxxxx. Except as set forth in the schedule attached
to this Agreement (the "Schedule of Exceptions"),
Seller and Xxxxxxxx jointly and severally covenant,
represent and warrant as follows, each of which is true
and correct as of the date of this Agreement and shall
be true and correct on the Closing Date and each of
which shall survive the Closing Date and the
transactions contemplated hereby, to the extent set
forth in Paragraph 15.16.
3.1. Corporate Existence, Qualifications and
Power of Seller. Seller is a corporation duly
organized and validly existing under the laws of the
State of Wisconsin. Seller has the corporate power and
authority to own and use its properties and to transact
the Business, and is licensed or qualified as a foreign
corporation in all jurisdictions in which such
licensing or qualification is required and where the
failure to be so licensed or qualified could reasonably
be anticipated to have a material adverse effect on the
Business. Seller has the corporate power to enter into
and consummate the transactions contemplated by this
Agreement. Seller does not have any subsidiaries or
any interest or investment in any partnership, joint
venture, corporation or other entity, except as
disclosed on attached Exhibit 3.1.
3.2. Authorization of Agreement by Seller. The
execution and delivery of this Agreement do not, and,
subject to the receipt of the consents referred to in
Paragraph 8.7, the consummation of the transactions
contemplated by this Agreement will not, violate or
conflict with any provisions of applicable law or the
Articles of Incorporation or Bylaws of Seller or result
in a breach of, or constitute a default under, or
result in the acceleration of, any obligation or loans
under any agreement or instrument to which Seller or
Xxxxxxxx is a party or by which either of them is bound
or violate any order, judgment, award or decree to
which either of them is a party or by which either of
them is subject, which violation, conflict, breach or
default could have a material adverse effect on (i) the
Business, the Assets, or the Obligations or (ii) the
consummation of the transactions contemplated hereby.
The execution and delivery of this Agreement and the
consummation by Seller of the transactions contemplated
herein have been approved by the Board of Directors and
shareholders of Seller, which constitutes all action
required by applicable law and the Articles of
Incorporation and Bylaws of Seller to authorize and
approve the execution, delivery and performance of this
Agreement by Seller and the consummation by it of the
transactions contemplated herein.
3.3. Financial Statements. Seller has delivered
to Buyer an audited balance sheet of Seller as of
December 31, 1994, audited financial statements of
Seller for its fiscal year ended December 31, 1994, and
audited financial statements of Seller for the period
from January 1, 1995 to September 30, 1995
(collectively, the "Audited Financial Statements").
The Audited Financial Statements have been prepared
based upon the accounting records of Seller in
accordance with the normal and customary practices of
Seller in the preparation of audited financial
statements and in the ordinary course of its business,
and on a consistent basis. In addition to the Final
Balance Sheet to be delivered pursuant to Paragraph
1.4, Seller not later than February 29, 1996 will also
cause to be prepared and delivered to Buyer an audited
statement of earnings for the period from January 1,
1995, through the Closing Date (the "Final Statement of
Income"). The Final Statement of Income will be
reviewed by BDO Xxxxxxx and will be prepared in
accordance with GAAP.
3.4. Full Disclosure. Neither this Agreement nor
any other agreement, document, certificate or statement
furnished or to be furnished to Buyer or to any other
party in connection with the transactions contemplated
hereby, contains any untrue statement of a material
fact or omits to state a material fact necessary in
order to make the statements contained herein or
therein, in light of the circumstances under which they
were made, not misleading.
3.5. Events Subsequent to Non-Binding Term Sheet.
Since September 15, 1995, except as set forth on
attached Exhibit 3.5 hereto, there has been no (i)
change in the condition of the Assets or liabilities of
Seller or the Business (other than changes in the
ordinary course of business, none of which individually
has or cumulatively have had a material adverse effect
on any of the Assets, the Obligations, or the Business)
or (ii) damage, destruction or loss, whether covered by
insurance or not, which individually or cumulatively
have had a material adverse effect on any of the
Assets, the Obligations or the Business.
3.6. Accounts Receivable. Except as set forth on
attached Exhibit 3.6, the Accounts Receivable will be
(a) valid and subsisting, (b) subject to no known
defenses, offsets or counterclaims, and (c) good and
collectible within six (6) months of the Closing Date
in the ordinary course of business at the aggregate
amounts of the Accounts Receivable, net of the reserves
therefor reflected on the Final Balance Sheet.
3.7. Undisclosed Liabilities. Except as set
forth on attached Exhibit 3.7, Seller does not have,
and through the Closing Date will not have, any
material liabilities, fixed or contingent, liquidated
or accrued, primary or secondary, by agreement or by
operation of law, including, without limitation,
liabilities for federal, state, local or foreign taxes
or liabilities to customers or suppliers for which
adequate provisions have not been made on the Final
Balance Sheet (other than liabilities incurred in the
ordinary course of business, none of which individually
or in the aggregate will have a material adverse effect
on the Business).
3.8. Tax Returns and Audit. Seller has filed, or
caused to be filed, with the appropriate federal, state
and local agencies, all tax returns and tax reports
required by law to be filed by them. All income,
profits, franchise, sales, use, ownership, occupation,
property, excise, ad valorem, and any other taxes due
have been fully paid, or adequate reserves have been
established for the same and are reflected on the
Audited Financial Statements, except for such as may
have accrued or been incurred in the ordinary course of
business since September 30, 1995, and there exist no
liens, and to the knowledge of Seller, there are no
facts or circumstances which could reasonably be
anticipated to result in any liens for unpaid or
delinquent taxes, except for liens for current taxes
not yet due.
3.9. Title to Assets. Seller has good and
marketable title to all Assets, free and clear of any
liens, mortgages, pledges, encumbrances, claims,
charges of any kind, except (i) liens shown on the
Audited Financial Statements or incurred in the normal
course of business since September 30, 1995 and
reflected on the Final Balance Sheet as securing
specified liabilities, (ii) liens for current taxes not
yet due, (iii) minor imperfections of title and
encumbrances, if any, which are not substantial in
amount, do not detract from the value of the property
subject thereto or impair the operations of the
Business and have arisen only in the ordinary course of
business and consistent with past practice, and (iv) as
identified on attached Exhibit 3.9.
3.10. Patents and Data, Software and Related
Information. Set forth on attached Exhibit 3.10 is a
list and brief description of each patent, application
for patent, trademark, service xxxx, trade name and
copyright included within (but not comprising the whole
of) the Patents and Data, Software, and the Related
Information, including (as appropriate) where such
items are filed, issued and/or registered. Except as
set forth on attached Exhibit 3.10, title to all such
items is held by Seller, free and clear of all adverse
claims, liens, security interests, restrictions and
other encumbrances, and there are no interferences,
proceedings or infringement suits pending or, to the
knowledge of Seller, threatened, and neither Seller nor
Xxxxxxxx has received any notice that Seller is
infringing upon the right of any other person under any
other intellectual property, copyright, patent,
trademark, service xxxx or trade name in the conduct of
the Business. Neither Seller nor Xxxxxxxx has received
any notice in writing of any claim, lien, security
interest, restriction or encumbrance adversely
affecting Seller's rights to all other items comprising
the Patents and Data and Related Information. Xxxxxxxx
has no interest in any of the Patents and Data and the
Related Information. Seller has the right (subject to
the rights of any third parties set forth on attached
Exhibit 3.10) to use the intellectual property,
software, patents, trademarks, service marks, trade
names and copyrights upon the products or with respect
to the services upon or in respect of which they have
been or are currently being used by Seller. Except as
listed on attached Exhibit 3.10, there are no claims,
demands or proceedings instituted, pending (or to the
best knowledge of Seller, threatened) nor does Seller
have actual knowledge of any facts and circumstances
which could reasonably be anticipated to result in any
claims, demands or proceedings, pertaining to or
challenging the right of Seller to obtain, maintain or
use any such intellectual property, patents,
trademarks, service marks, trademarks or copyrights, or
any application or registration therefor, or any
copyrighted or trade secret material, or any invention,
process, machine, manufacture or composition of matter
included in the Patents and Data, Software or Related
Information. Except for rights granted pursuant to the
Customer Contracts or as listed on attached Exhibit
3.10, Seller has not granted any licenses, sublicenses
or other rights under any of the patents (or any
applications or registrations therefor), software,
trade secrets, inventions, copyrights, trade names or
trademark (or any applications or registrations
therefor), service marks (or any applications or
registrations therefor), know-how or other intellectual
property owned by or licensed to Seller and including
the Patents and Data, Software and the Related
Information.
3.11. Necessary Property. The Assets constitute
all of the assets, property and contracts used in the
operation of the Business in the manner and to the
extent operated by Seller, as of September 30, 1995.
Neither Xxxxxxxx nor any of the officers, directors or
employees of Seller have any rights of ownership, use
or any other rights with respect to any of the Assets.
3.12. Leases. Set forth on Exhibit 3.12 is a
list of each lease for real or personal property
involves payments by Seller aggregating in excess of
$1,000 annually. The property covered by the terms of
the leases is currently occupied or used by Seller as
lessee under the terms of said leases for the Business,
and, in particular, in the case of any leases for real
property, Seller is entitled, by the terms of said
leases, to use any leased premises for the purposes for
which and in the manner in which they are currently
being used by Seller, and such use complies in all
material respects with all applicable zoning and
building code ordinances and any other applicable
ordinances, laws or regulations, including those that
relate to the use, storage, and disposal of hazardous
materials. Except as set forth on attached Exhibit
3.12, all rentals due under the Leases have been paid
and there exists no default by Seller under any of the
Leases which would have a material adverse effect on
the operation of the Business which cannot be cured
without material penalty to Seller under the terms of
said Leases and no event has occurred which, with the
passage of time or the giving of notice, or both, would
result in any event of default thereunder by Seller or
prevent Seller, currently, or Buyer, after consummation
of the transactions contemplated hereunder, from
exercising or obtaining the benefits thereunder.
Except as noted on attached Exhibit 3.12, all of the
Leases are valid and in full force and effect.
3.13. Customer Contracts. Set forth on attached
Exhibit 3.13 is a list of all of the Customer Contracts
and of all customers who have generated any revenue for
Seller from and after January 1, 1992. Each of the
Customer Contracts is valid and subsisting, has not
been subsequently amended (except as set forth on
Exhibit 3.13) and is currently in full force and effect
according to the terms of such Customer Contract; and
Seller has not assigned any rights thereto, except for
liens listed on attached Exhibit 3.13. Except as set
forth on attached Exhibit 3.13, (i) there exists no
event of default under any Customer Contract by Seller
or, to the knowledge of Seller, by the other party
thereto, and (ii) no event of default by Seller has
occurred and is continuing which would prevent Buyer
from exercising or obtaining the benefits thereunder
(including any options contained therein), would cause
the acceleration of any obligation of Seller under any
of such contracts, or would cause the creation of a
lien or encumbrance upon any of the Assets which are
material to the Business.
3.14. Contracts and Commitments. Except as set
forth on attached Exhibit 3.13, Seller does not have
outstanding:
(a) Any single contract, including
consulting contracts providing for an expenditure
in excess of $1,000, or contracts in the aggregate
providing for expenditures in excess of $1,000 for
the purchase, leasing or licensing of any real
property, machinery, equipment, software or other
items which are in the nature of a capital
investment, or for consulting services.
(b) Any loan agreement, indenture,
promissory note, mortgage, conditional sales
agreement, guaranty, surety agreement, installment
debt agreement or other similar type agreement.
(c) Any contract for sale or purchase of
materials, products, or supplies which contains an
escalator, renegotiation or redetermination clause
or which establishes a commitment for sale or
purchase for a fixed term, except for those
contracts which (A) are cancelable by Seller on
thirty (30) days notice or less without penalty or
(B) involve payments by Seller of less than $5,000
per year.
(d) Any other material contract or
commitment (other than the Customer Contracts)
which is not cancelable on thirty (30) days notice
or less without penalty.
3.15. Use and Condition of Property. Except as
set forth on Exhibit 3.15, to the Knowledge of Seller,
all of the Fixed Assets are suitable for the uses for
which they are intended, in good operating condition
and repair, and free from any known defects except
normal wear and tear. Except as set forth in any
Exhibit attached hereto, to the Knowledge of Seller the
Business is in compliance with applicable laws, rules
or regulations relating to the Fixed Assets or any
improvements thereto.
3.16. No Breach of Statute, Decree, Order or
Contract. Seller is not in default under, or in
violation of the provisions of (a), any provisions of
its Articles of Incorporation or Bylaws or (b) any
provision of any franchise or license or of any
promissory note, indenture or any evidence of
indebtedness or security therefor, any lease, contract,
purchase or other commitment or any other agreement by
which it or any of its property is bound, which in any
such case as to matters described in (b) could
materially adversely affect the consummation of the
transactions contemplated in this Agreement, the
Business, the Assets or the Customer Contracts, nor is
Seller in violation of any applicable statute, law,
ordinance, decree, order, rule or regulation of any
governmental body which may reasonably be anticipated
to result in any material adverse effect on the
transactions contemplated by this Agreement, the
Business, the Assets or the Customer Contracts.
3.17. Approvals and Consents. Except as set
forth on attached Exhibit 3.17, no authorization,
consent, permit, license or approval of, or
declaration, registration or filing with, any person or
governmental, quasi-governmental or regulatory
authority or agency is necessary for the execution and
delivery by Seller or Xxxxxxxx of this Agreement and
the other agreements required to be executed in
connection with the transactions contemplated by this
Agreement.
3.18. Litigation. There is no suit, claim,
action or proceeding now pending before any court,
administrative or regulatory body, or any governmental
agency, or to Seller's Knowledge, any threatened claim
which may result in any judgment, order, decree,
liability or other determination which will, or could,
have a material adverse effect upon the Business, the
Assets or the Customer Contracts or the consummation of
the transactions contemplated hereby. Seller is not
subject to any such judgment, order, decree, liability
or other determination which has, or could reasonably
be expected to have such effect.
3.19. Discrimination, Occupational Safety and
other Statutes and Regulations. No person or party
(including, but not limited to, governmental agencies
of any kind) has any claim against Seller pending
before any court or administrative agency, and, to
Seller's Knowledge, no claim of such nature has been
threatened against Seller arising out of any statute,
ordinance or regulation relating to discrimination in
employment or employment practices or occupational
safety and health standards (including, but without
limiting the foregoing, the Fair Labor Standards Act,
Title VII of the Civil Rights Act of 1964, or the Age
Discrimination in Employment Act of 1967, all as
amended, where applicable).
3.20. Employees. Set forth on attached Exhibit
3.20 is a list of all employees of Seller as of the
date of this Agreement and their respective base rates
of pay during Seller's fiscal year ended December 31,
1994 (including all incentives, bonuses, commissions
and similar cash payments, all identified separately
from the employee's base rate of pay), and all
employees of Seller retained since January 1, 1995,
together with their respective rates of compensation
and the actual amounts, if any, paid to each such
employee through November 25, 1995.
3.21. Environmental Matters. Seller's ordinary
course business activities have no material
environmental impact. Seller has not violated, is not
violating and neither Seller nor Xxxxxxxx has received,
with respect to the Seller or the Business, a notice or
charge asserting any violation by Seller of the Federal
Solid Waste Disposal Act, the Federal Clean Air Act,
the Federal Clean Water Act, the Federal Resource
Conservation Recovery Act of 1976 ("RCRA"), the Federal
Comprehensive Environmental Responsibility Clean-Up and
Liability Act of 1980 ("CERCLA"), the Toxic Substance
Control Act of 1976 or any other federal, state, local
or foreign laws including rules and regulations
thereunder, regulating or otherwise affecting the
environment ("Environmental Laws") as the same may have
been amended prior to the date of this Agreement.
Except as set forth on Exhibit 3.21, no asbestos, PCBs,
urea formaldehyde or polychlorinated biphenyls are
present on the premises utilized by Seller in operation
of the Business (the "Leased Premises"). None of the
equipment or machinery of Seller employed in the
Business is required to be upgraded or modified to be
in compliance with Environmental Laws. During Seller's
use of the Leased Premises, neither Seller nor any
third party has disposed of any substance in any manner
on the Leased Premises and the improvements thereon in
violation of any Environmental Laws. With respect to
Seller and the Business, no environmental claims have
been asserted and none have been threatened or are
anticipated to be asserted against Seller, Xxxxxxxx,
the Assets or the
3.22. No Additional Liabilities. Other than the
obligations specifically assumed by ASI at Closing, ASI
is not assuming and will not be responsible or liable
for any liabilities (including but not limited to
warranty liability or product liability on any
products) relating to Seller or the Business being
transferred because of this Agreement, or the Assets.
3.23. Complete Business. Except for the Excluded
Assets, the Assets are all of the assets used by Seller
in connection with the Business being transferred
hereby and, with the exception of working capital, no
other assets are needed to continue to conduct the
Business as it is currently being conducted.
3.24. No Limitation of Representations or
Warranties. Any inspection or investigation by or on
behalf of Buyer shall not limit or affect any of the
representations or express or implied warranties of
Seller and Xxxxxxxx which are contained herein, except
that, notwithstanding any provision of this Agreement
to the contrary, in the event that Seller or Xxxxxxxx
can prove that Buyer had actual knowledge (which in
this context is intended to mean that Buyer had actual
knowledge of a fact or condition and that the
significance of such fact or condition was or should
have been apparent to a person not involved in the
business on a day-to-day basis), of a breach of any
covenant, representation or warranty of Seller or
Xxxxxxxx set forth in this Agreement or any agreement
or instrument executed pursuant hereto, then neither
Seller nor Xxxxxxxx shall be liable hereunder for any
loss to the extent that such loss results from or
arises out of any such breach.
3.25. Insurance. Attached Exhibit 3.25 contains
a true and correct list of all policies of insurance in
respect to the Business (including the amounts) in
which Seller is named as the insured party. Seller
will continue to maintain the present coverage afforded
by such policies in full force and effect up to and
including the Closing Date.
3.26. Licenses, Etc. Attached Exhibit 3.26
contains a true and correct list setting forth all
licenses, rights and authorities issued by the State of
Wisconsin and other states, the United States, and any
municipality, foreign or domestic governmental or quasi-
governmental agency or administrative body, and any and
all applications for same, which authorize Seller to
conduct the Business. Except as set forth in attached
Exhibit 3.26, such licenses, rights, and authorities to
Buyer. In addition, attached Exhibit 3.26 contains a
detailed summary of any and all claims and actions
asserted against Seller by notice in writing to Seller
within the past five (5) years by any of the above
referenced governmental bodies on account of any
alleged violation of any such license, right or
authority.
3.27. Ongoing Business. Seller shall (a) keep
the operations and business of the Business intact
until the Closing Date, (b) use reasonable efforts to
keep available to Buyer the services of the present
employees of the Business, and (c) preserve the
business relations of the subcontractors and customers
of Seller and the business relations of others with
whom Seller and Xxxxxxxx have business relations in
respect of the Business.
3.28. Access to Seller. Seller will, and will
cause its employees and agents (including bankers,
in-house and other accountants, attorneys and insurance
representatives) to, allow the officers, employees and
authorized representatives of Buyer free and full
access during normal business hours to the plants,
properties, books and records of Seller, including,
without limitation, the right to perform environmental
liability audits, contact customers, employees,
suppliers, bankers, accountants, attorneys, insurance
representatives, state and federal regulatory agencies
and others, and will from time to time promptly furnish
Buyer with such additional financial and operating data
and other information as to the business and properties
of Seller as may from time to time be requested by
Buyer. Xxxxxxxx hereby agrees to cause Seller to
fulfill its obligation under this Paragraph 3.28.
3.29. Labor Controversies. With respect to the
employees of the Business, Seller is in compliance in
all material respects with all federal, foreign, state
and local laws, rules and regulations relating to the
employment of labor, employment discrimination,
employee welfare and labor standards which are
applicable to it. No proceedings are pending before
any court, government agency or instrumentality or
arbitrator relating to labor matters, and to the
knowledge of Seller, there is no pending investigation
by any governmental agency or threatened claim by any
such agency or other person with respect to Seller
relating to labor or employment matters. Seller is not
a party to any agreement or contract with any union,
labor organization, employee group, or other entity or
individual which affects the employment of employees of
the Business, including but not limited to, any
collective bargaining agreements or labor contracts.
3.30. ERISA.
(a) Attached Exhibit 3.30 lists all profit
sharing, pension or retirement plans, programs,
arrangements or agreements, and each other
employee benefit plan, program or agreement
maintained or contributed to or required to be
contributed to for the benefit of any employee or
terminated employee of the Business, whether
formal or informal (the "Plan" or "Plans").
Seller does not have any formal plan or
commitment, whether legally binding or not, to
create any additional Plan or modify or change any
existing Plan that would affect any employee or
terminated employee of the Business.
(b) No Plans are covered by Title IV of
ERISA, nor has Seller ever maintained any Plan
covered by Title IV of ERISA with respect to
employees or former employees of the Business.
With respect to each Plan, the Seller and each
such Plan is, and at all times has been, in
compliance in all material respects with all
applicable laws including, without limitation, the
Code and ERISA. All contributions, premiums or
other payments required by the Plans have been
made on or before their due dates. There are no
pending or threatened claims under, by or on
behalf of any of the Plans, by any employee or
beneficiary covered by any such Plan, or otherwise
involving any such Plan (other than routine claims
for benefits), nor have there been any "prohibited
transactions" within the meaning of ERISA or the
Code. Each Plan that is intended to qualified
under Section 401(d) or Section 401(k) of the Code
has received a favorable determination letter from
the Internal Revenue Service to that effect, and
no fact or event has occurred from the date
thereof which would adversely affect the qualified
status of such Plans. The 401(k) Plan maintained
by Seller is not "top heavy" within the meaning of
Section 416(g) of the Code.
3.31. Vyas Consulting Services.
(a) The Service Agreement between Seller,
Interra Technologies (India) PVT. Ltd. ("Interra-
India") and Interra Technologies, Inc. ("Interra")
dated December 1, 1995 (the "Services Agreement")
is currently on a month to month basis and is in
full force and effect according to its terms.
(b) There exists no event of default
(including any payment default) by Seller under
the agreement in effect immediately prior to the
Services Agreement or under the Services Agreement
and to the knowledge of Seller, there exists no
event of default by Interra and Interra-India.
(c) To the knowledge of Seller, no dispute
exists between Seller, Interra and Interra-India
under the agreement in effect immediately prior to
the Services Agreement or under the Services
Agreement.
(d) No authorization, consent, permit,
license or approval of, or declaration,
registration or filing with, any person or
governmental, quasi-governmental or regulatory
authority or agency is required of Seller, or to
the knowledge of Seller, of Interra or Interra-
India, in connection with the execution, delivery
or performance of the Services Agreement by
Seller, Interra and Interra-India, respectively.
(e) No authorization, consent, permit,
license or approval of, or declaration,
registration or filing with, any person or
governmental, quasi-governmental or regulatory
authority or agency would be required of Buyer,
Interra or Interra-India in connection with any
assignment of the Services Agreement to Buyer and,
if so assigned, the performance of the Services
Agreement by Interra, Interra-India and Buyer.
4. Representations and Warranties of Buyer.
Buyer hereby makes the following representations and
warranties, each of which is true and correct as of the
date of this Agreement and as of the Closing Date and
shall survive the Closing Date and the transactions
contemplated hereby, to the extent set forth in
Paragraph 15.16.
4.1. Corporate Status. Buyer is a corporation
duly organized and validly existing under the laws of
the State of Colorado, and has the corporate power and
the authority to own and use its properties and to
transact the business in which it is engaged. Buyer
has the corporate power and authority to enter into and
consummate the transactions contemplated by this
Agreement.
4.2. Authorization of Agreement. The execution
and delivery of this Agreement does not, and the
compliance with and the fulfillment of, and the
consummation of the transactions contemplated by, this
Agreement will not violate or conflict with any
provisions of the Articles of Incorporation or Bylaws
of Buyer or result in a breach of, or constitute a
default under, or result in the acceleration of, any
obligation under any agreement or instrument to which
Buyer is a party or by which it is bound, or violate
any order, judgment, award or decree to which it is a
party or to which it is subject which could have a
material adverse effect on (i) Buyer or its assets or
(ii) the consummation of the transactions contemplated
hereby. The execution and delivery of this Agreement
and the consummation by Buyer of the transactions
contemplated herein have been approved by the Board of
Directors of Buyer, which constitutes all action
required by law, Buyer's Articles of Incorporation, its
Bylaws or otherwise to authorize and approve the
execution, delivery and performance of this Agreement
by Buyer and the consummation by it of the transactions
contemplated herein.
4.3. Litigation. There is no suit, claim, action
or proceeding now pending or, to the knowledge of
Buyer, threatened before any court, administrative or
regulatory body, or any governmental agency which may
result in any judgment, order, decree, liability or
other determination which will, or could, have a
material adverse effect of any kind upon (i) Buyer or
its assets or (ii) the consummation of the transactions
contemplated hereby. Buyer is not subject to any such
judgment, order, decree, liability or other
determination which has or reasonably could be expected
to have such effect.
4.4. Shares. The Subject Shares to be issued by
Seller to Buyer hereunder, have been duly and validly
authorized and, when issued as provided herein, will be
duly and validly issued and fully paid and non-
assessable, free and clear of all liens, claims, and
encumbrances except those in favor of Buyer as
specifically provided in this Agreement.
4.5. Capitalization. Buyer has delivered true
and complete copies of its Articles of Incorporation
and Bylaws to Seller. The Authorized capital stock of
Buyer consists of 100,000,000 shares of Common Stock
and 2,500,000 shares of preferred stock, no par value
("Preferred Stock"). As of the date of this Agreement,
(i) 2,832,349 shares of Common Stock are issued and
outstanding, (ii) no shares of Preferred Stock are
issued and outstanding, and (iii) 711,275 shares of
Common Stock are subject to issuance pursuant to stock
options, warrants or similar agreements. Except as set
forth in clause (iii) above, as of the date of this
Agreement, there are no options, warrants or other
rights of any character obligating Buyer to issue or
sell any shares of its capital stock. None of the
issued and outstanding shares of Common Stock were, and
none of the Subject Shares will be, issued in violation
of any preemptive rights.
4.6. SEC Documents.
(a) Buyer has filed all forms, reports and
documents required to be filed with the Securities
and Exchange Commission (the "SEC") since
September 30, 1994, and as of the date of this
Agreement has delivered to Seller in the form
filed with the SEC (i) its Annual Report on Form
10-KSB for the fiscal year ended September 30,
1994, (ii) its Quarterly Reports on Form 10-QSB
for the periods ended December 31, 1994, March 31,
1995 and June 30, 1995, (iii) the definitive Proxy
Statement for any meeting of shareholders of Buyer
held since September 30, 1994, (iv) all Current
Reports on Form 8-K filed since September 30,
1994, (v) all registration statements filed with
the SEC since September 30, 1994, and (vi) all
amendments and supplements filed with the SEC to
all such reports and registration statements
(collectively, the "Buyer SEC Reports").
(b) The Buyer SEC Reports, and all reports
filed by Buyer with the SEC after the date of this
Agreement and on or prior to the Closing, (i) were
or will be prepared in accordance with applicable
rules and regulations in all material respects,
and (ii) did not at the time they were filed,
contain any untrue statement of a material fact or
omit to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading.
(c) Since the date of the last Buyer SEC
Report filed prior to the date of this Agreement,
there has not been any change in the financial
condition, results of operations, or business of
Buyer which has a material adverse effect on
Buyer.
4.7. Securities Act Compliance. The issuance of
the Subject Shares will comply with all applicable
federal and state securities laws.
4.8. NASDAQ. Seller will comply with any
applicable NASDAQ requirements regarding the Subject
Shares.
5. Opinions of Counsel.
5.1. Opinions of Counsel of Seller. Buyer shall
have received as of the Closing Date, an opinion from
Seller's counsel, Xxxxxxx & Xxxx, S.C., dated as of the
Closing in the form attached to this Agreement as
Exhibit 5.1.
5.2. Opinion of Counsel of Buyer. Seller shall
have received as of the Closing Date, opinions from
Buyer's counsel, Xxxxxx X. Xxxxxxx, P.C., and from
Xxxxxxx & Xxxxxx L.L.C., dated as of the Closing Date,
in the form attached to this Agreement as Exhibits 5.2
and 5.2.1, respectively.
6. Indemnification.
6.1. Indemnification of Buyer.
(a) Seller and Xxxxxxxx jointly and
severally agree to indemnify Buyer and Buyer's
officers, directors, shareholders, agents and
employees and to hold them harmless from and
against any and all damages, losses, deficiencies,
actions, demands, judgments, costs and expenses
(including reasonable attorneys' and accountants'
fees) (collectively, "Losses") of or against Buyer
resulting from (i) any misrepresentation or breach
of warranty on the part of Seller or Xxxxxxxx in
this Agreement or in any document or agreement
executed and/or delivered by Seller or Xxxxxxxx in
connection herewith; (ii) any nonfulfillment of
any agreement or covenant contained herein or in
any certificate, documents, agreement or
instrument delivered hereunder on the part of
Seller or Xxxxxxxx; and/or (iii) any failure of
Seller or Xxxxxxxx to pay and/or perform any
liability or obligation of Seller, Xxxxxxxx or the
Business other than the Assumed Liabilities; and
(iv) any loss, liability, or expenses, including
reasonable attorneys' fees and costs, incurred by
Buyer in pursuing a claim against Intelligraphics,
Inc. of Texas for infringement of the name
"Intelligraphics"; provided for this purpose, the
parties acknowledge that Xxxxxxx & Xxxx, S.C. has
been retained to pursue such claim and will
continue to be the counsel which will pursue the
matter subsequent to the Closing.
(b) Notwithstanding anything in this
Agreement to the contrary, Seller and Xxxxxxxx
shall not be obligated to indemnify, defend or
hold harmless Buyer pursuant to Paragraph
6.1(a)(i) of this Agreement, in respect of any
breach of any representation or warranty made in
this Agreement or any document executed in
connection herewith unless, the aggregate Losses
for which Buyer is entitled to indemnification
under said Paragraph 6.1(a)(i) shall exceed twenty-
five thousand dollars ($25,000.00) (in which event
the entire loss will be payable), and in no event
shall Seller's and Xxxxxxxx'x aggregate liability
to indemnify Buyer in respect of all Losses under
said Paragraph 6.1(a)(i) exceed $4,300,000.
Notwithstanding the foregoing, no Loss arising
from a breach of a representation and warranty in
Sections 3.8, 3.9 or the second sentence of
Section 3.10 will be subject to the $25,000
"basket" provided for above; that is, any such
Loss will be payable by Seller and Xxxxxxxx
without dilution or effect against the $25,000
"basket.".
(c) Seller and Xxxxxxxx may satisfy their
obligations under Paragraph 6.1(a) of this
Agreement by transferring Subject Shares to Buyer
except with respect to any claim by Buyer relating
to the failure to obtain Consents specified in
Section 1.3(b)(1) and (ii), which shall be paid in
cash to Buyer. Such shares shall be valued at
fifty percent (50%) of the Market Price of the
Common Stock as of the most recent business day
preceding the date of transfer. If applicable,
Seller and Buyer shall direct the Escrow Agent to
transfer to Buyer such number of Subject Shares as
Seller may designate in accordance with the
provisions of this Paragraph 6.1(c).
6.2. Indemnification of Seller and Xxxxxxxx.
(a) Buyer agrees to indemnify Seller and
Xxxxxxxx and to hold each of them harmless from
and against any and all Losses of or against
Seller or Xxxxxxxx resulting from (i) any
misrepresentation or breach of warranty or
representation on the part of Buyer in this
Agreement or in any document or agreement executed
and/or delivered by Buyer in connection herewith;
(ii) any nonfulfillment of any agreement or
covenant contained herein or in any certificate,
document or instrument delivered hereunder on the
part of Buyer; and/or (iii) any failure of Buyer
to pay and/or perform when due any of the Assumed
Liabilities.
(b) Notwithstanding anything in this
Agreement to the contrary, Buyer shall not be
obligated to indemnify, defend or hold harmless
Seller or Xxxxxxxx pursuant to Paragraph
6.2(a)(i), in respect of any breach of any
representation or warranty made in this Agreement
or any document executed in connection herewith
unless, and only to the extent, the aggregate
Losses for which Seller and Xxxxxxxx are entitled
to indemnification under said Paragraph 6.1(a)(i)
shall exceed twenty-five thousand dollars
($25,000.00) and in no event shall Buyer's
aggregate liability to indemnify Seller and
Xxxxxxxx in respect of all Losses under said
Paragraph 6.2(a)(i) exceed the purchase price set
forth in Section 1.2 above.
6.3. Procedure Relative to Indemnification.
(a) In the event that any party hereto shall
claim that it is entitled to be indemnified
pursuant to the terms of this Paragraph 6, it or
he (the "Claiming Party") shall so notify the
party or parties against which the claim is made
(the "Indemnifying Party") in writing of such
claim within forty-five (45) days after receipt of
a notice of such claim or notice of any claim of a
third party that may reasonably be expected to
result in a claim by such party against the party
to whom such notice is given. Such notice shall
specify the breach of representation, warranty or
agreement claimed by the Claiming Party and the
liability, loss, cost or expense incurred by, or
imposed upon, the Claiming Party on account of any
such liability, loss, cost or expense. Failure to
give such notice will not relieve Indemnifying
Party of its indemnification obligation, except to
the extent the defense of the Indemnifying Party
against such claim was prejudiced. If such
liability, loss, cost or expense is liquidated in
amount, the notice shall so state and such amount
shall be deemed the amount of the claim of the
Claiming Party. If the amount is not liquidated,
the notice shall so state and in such event a
claim shall be deemed asserted against the
Indemnifying Party on behalf of the Claiming
Party, but the amount of the claim of the Claiming
Party shall be deemed undetermined.
(b) If such claim shall involve a suit,
claim or demand of a third party, the Indemnifying
Party shall, upon receipt of such written notice
and at its expense, defend such claim in its own
name or, if necessary, in the name of the Claiming
Party; provided, however, that if the proceeding
involves a matter solely of concern to the
Claiming Party in addition to the claim for which
indemnification under this Paragraph 6 is being
sought, such matter of sole concern shall be
within the sole responsibility of the Claiming
Party and its counsel. The Claiming Party will
cooperate with and make available to the
Indemnifying Party such assistance and materials
as may be reasonably requested of it, and the
Claiming Party shall have the right, at its
expense, to participate in the defense. The
Indemnifying Party shall have the right to settle
and compromise such claim only with the consent of
the Claiming Party (which consent shall not be
unreasonably withheld; provided, that such consent
can be reasonably withheld if the party from which
such consent is requested is not fully released by
the settlement).
(c) In the event the Indemnifying Party
shall notify the Claiming Party that it disputes
any claim made by the Claiming Party and/or it
shall fail to undertake a defense against such
claim, then the Claiming Party shall have the
right to conduct a defense against such claim and
shall have the right to settle and compromise such
claim upon five (5) days notice to, but without
the consent of, the Indemnifying Party. Once the
amount of such claim is liquidated and the claim
is finally determined, the Claiming Party shall be
entitled to pursue each and every remedy available
to it at law or in equity to enforce the
indemnification provisions of this Paragraph 6
and, in the event it is determined, or the
Indemnifying Party agrees, that it is obligated to
indemnify the Claiming Party for such claim, the
Indemnifying Party agrees to pay all costs,
expenses and fees, including all reasonable
attorneys' fees which may be incurred by the
Claiming Party in its efforts to enforce
indemnification under this Paragraph 6, whether
the same shall be enforced by suit or otherwise.
7. Accounts Receivable. After the Closing Date,
all payments collected for those accounts which were
included within the Accounts Receivable on the Final
Balance Sheet shall, unless otherwise designated for
payment of a specific invoice by the account debtor,
first be applied against outstanding invoices in the
order of issuance (i.e., against the oldest invoices
first). Buyer agrees to use normal and customary
efforts in collecting the Accounts Receivable; provided
that nothing contained herein shall be construed as
requiring Buyer to file suit, employ the services of a
collection agency or commence any other official
proceeding in order to collect any delinquent accounts
included with the Accounts Receivable. Buyer will
provide Seller with written progress reports as
reasonably requested by Seller as to the status of the
collection of the Accounts Receivable. If at the end
of six (6) months from the Closing Date hereunder there
remain any Accounts Receivable which are uncollected
(over and above the amount of the reserves as reflected
on the Final Balance Sheet), Buyer shall give written
notice to Seller within fifteen (15) days of the
expiration of said six (6) month period stating such
fact and setting forth the amount of the Account
Receivable uncollected (the "Uncollected Receivables")
after deducting any applicable reserves, and by
delivering such notice Seller will be deemed to have
made a claim (an "Accounts Receivable Claim") for such
amount. Within fifteen (15) days of the delivery by
Buyer of any such notice to Seller, Seller shall pay
the amount of such Accounts Receivable Claim to Buyer,
in cash, or from the Subject Shares escrowed pursuant
to Section 1.8 above. Seller's obligation to pay any
Accounts Receivable Claim hereunder shall be subject to
any specific rights Seller may have hereunder or may
have in general at law to dispute the amount or
propriety of any such Accounts Receivable Claim. Upon
payment to Buyer by Seller of an Accounts Receivable
Claim, Buyer shall be deemed to have assigned to Seller
(or its designee) all such Uncollected Receivables. In
the event that Buyer should receive payment for any
such Uncollected Receivables, any amounts so received
by Buyer shall promptly be paid over to Seller (or its
designee).
7.1. Remedies Cumulative. Except as herein
expressly provided, the remedies provided herein shall
be cumulative and shall not preclude assertion by any
party hereto of any other rights or the seeking of any
other remedies against any other party hereto, provided
they are consistent with this Agreement.
8. Conditions Precedent to Buyer's Obligation to
Close. All obligations of Buyer to complete the
transaction contemplated under this Agreement are
subject to the satisfaction by Seller and Xxxxxxxx or
waiver by Buyer, prior to or at Closing, of each of the
following conditions, with respect to which Seller
agrees to use its good faith efforts to fulfill on or
before Closing:
8.1. Continued Validity of Representations and
Warranties. All representations and warranties made by
Seller and Xxxxxxxx contained in this Agreement shall
be true at and as of the Closing as though such
representations and warranties were made at and as of
such time, except for those waived as provided below.
8.2. Performance Conditions and Completion of
Agreements. Seller shall have performed and complied
with all agreements and conditions required by this
Agreement to be performed or complied with by it prior
to or at Closing.
8.3. Satisfaction with Financial Condition.
There shall have been no material adverse change in the
Assets or in the financial condition or prospects of
the Business since September 30, 1995.
8.4. Delivery of Documents. Prior to or at the
Closing, true and complete copies of all documents
listed on any Exhibit hereto shall have been delivered
to Buyer in a form acceptable to Buyer and Buyer's
counsel.
8.5. Employment Agreements. Buyer shall have
entered into employment agreements and non-competition
agreements with Xxxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxx
Xxxxxx in substantially the form attached hereto as
Exhibits 8.5-1, 8.5-2 and 8.5-3, respectively
(collectively, the "Executive Employment Agreements"),
and with the additional employees listed in Exhibit
8.5-4 attached hereto. Seller, Buyer and Xxxxxxxx
shall cooperate fully in arranging for such executive
employment agreements.
8.6. Other Agreements. Seller and Xxxxxxxx shall
have entered into a Voting Trust Agreement in the form
attached hereto as Exhibit 8.6-1; an Arbitration
Agreement in the form attached hereto as Exhibit 8.6-2,
an Investor Letter in the form attached hereto as
Exhibit 8.6-3, a Lock Up Agreement in the form attached
hereto as Exhibit 8.6-4, and any other agreements
reasonably required by counsel for Buyer, in addition
to that required under Paragraph 8.7 below, to
substantiate, to Buyer's satisfaction, the relationship
among Seller, INTERRA, and Xxxxxx X. Xxxx.
8.7. Consents Obtained. Except for those
Customer Contracts listed on Exhibit 8.7, all consents
to the consummation of the transaction contemplated in
this Agreement to the leases between Seller and
Business Enterprises and shall remain in full force and
effect at and as of the Closing (the "Required
Consents").
8.8. No Action. No suit, action, investigation,
inquiry or other legal or administrative proceeding by
any governmental authority or other person shall have
been instituted or threatened which seeks to enjoin,
restrain or prohibit, or which questions the validity
or legality of, the transactions contemplated hereby or
which otherwise seeks to affect or could affect the
transactions contemplated hereby or the Assets or
impose damages or penalties upon any party hereto if
such transactions are consummated.
8.9. Name Change. Intelligraphics shall have
taken all requisite action to change its corporate name
to a name which is not in any way similar to
Intelligraphics and shall have transferred to Buyer all
rights to any such names.
8.10. Termination Statements. Seller shall have
delivered UCC-3 termination statements in form and
substance acceptable for filing with the applicable
Wisconsin authorities, to terminate and release all
prior UCC filings with respect to the Assets, as of the
Closing Date.
9. Conditions Precedent to Seller's Obligation to
Close. The obligations of Seller and Xxxxxxxx to
consummate the transactions contemplated under this
Agreement are subject to the following conditions:
9.1. Continued Validity of Representations and
Warranties. All representations and warranties of
Buyer contained in this Agreement shall be true at and
as of the Closing as though such representations and
warranties were made at such time.
9.2. Performance Conditions and Completion of
Agreements. Buyer shall have performed and complied
with all agreements and conditions required by this
Agreement to be performed or complied with by it prior
to or at Closing.
9.3. Delivery of Documents; Purchase Price.
Prior to or at the Closing, true and complete copies of
all documents required to be delivered by Buyer to
Seller hereunder shall have been delivered to Seller in
a form acceptable to Seller and Seller's counsel, and
Buyer shall have delivered the Estimated Amount to
Seller by wire transfer and shall have transferred the
Subject Shares to the Escrow Agent and the Trustee as
provided in Paragraph 1.3.
9.4. No Action. No suit, action, investigation,
inquiry or other legal or administrative proceeding by
any governmental authority or other person shall have
been instituted or threatened which seeks to enjoin,
restrain or prohibit, or which questions the validity
or legality of, the transactions contemplated hereby or
which otherwise seeks to affect or could affect the
transactions contemplated hereby or the Assets or
impose damages or penalties upon any party hereto if
such transactions are consummated.
10. No Additional Liabilities. Other than any
obligations specifically assumed by ASI at Closing.
ASI is not assuming and will not be responsible or
liable for any liabilities relating to Intelligraphics
or Xxxxxxxx or the Business being transferred because
of this Agreement, or the Assets transferred pursuant
hereto, and Intelligraphics and Xxxxxxxx hereby agree
to indemnify and hold harmless ASI against any such
unassumed obligations or claims against ASI arising
from such obligations, under the terms of Paragraph
6.3.
11. Closing.
11.1. Closing. Subject to the satisfaction or
waiver of all conditions to the obligation of the
parties hereto to close as set forth herein, the
closing of the transaction provided for in this
Agreement ("Closing") shall take place at the offices
of Xxxxxxx & Xxxxxx L.L.C., in Denver, Colorado on
December 22, 1995 at 8:00 A.M. MST, or at such other
date, time and place as may be mutually agreed by the
Buyer and Seller, after all Required Consents have been
obtained as designated by Buyer by written notice given
to Seller and Xxxxxxxx five (5) days in advance of
Closing, unless Buyer and Seller agree otherwise. For
purposes hereof, the Closing shall be deemed to have
occurred effective 12:01 A.M., MST, on December 22,
1995.
11.2. Deliveries by Seller. Seller and Xxxxxxxx
agree to execute and deliver to Buyer or cause to be
delivered to Buyer, at the Closing, the following:
(a) A certificate executed by a duly
authorized officer of Seller and by Xxxxxxxx to
the effect that all warranties and representations
of Seller and Xxxxxxxx contained in this
Agreement, as supplemented pursuant to Paragraph
16.19, are true and correct in all material
respects at and as of the Closing and all
conditions precedent to the obligations of Buyer
to consummate the transaction contemplated herein
not waived by Buyer have been fulfilled by Seller
and Xxxxxxxx;
(b) An opinion of Xxxxxxx & Xxxx, S.C.,
legal counsel for Seller and Xxxxxxxx, as
described in Paragraph 5.1;
(c) To the extent available prior to
Closing, certificates of taxes due from each
jurisdiction in which Seller conducts business;
(d) A general warranty xxxx of sale and
other appropriate instruments of assignment and
conveyance, in form and substance satisfactory to
Buyer, dated as of the Closing Date, conveying to
Buyer good and marketable title to the Assets,
free and clear of all encumbrances, security
interests, liens, contracts of sale and matters of
record;
(e) General warranty assignments (and such
other documents as may be satisfactory to Buyer)
of the Customer Contracts and the other Assumed
Contracts and the Required Consents;
(f) Copies (dated as of the Closing Date) of
the resolutions of Seller's Board of Directors and
shareholders authorizing and approving this
Agreement and the consummation of each and every
transaction contemplated by this Agreement,
together with a certificate of incumbency,
certified by Seller's Secretary;
(g) New Employment Agreements or letters,
containing non-competition agreements and
confidentiality agreements, in form and content
satisfactory to Buyer, from those former employees
of Seller, as set forth on Exhibit 11.2(g),
including, but not limited to acknowledgment of
their termination of employment by Seller, their
subsequent employment by Buyer, and a release of
Buyer from any liabilities arising under their
employment with Seller;
(h) The Executive Employment Agreements duly
executed by Xxxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxx
Xxxxxx;
(i) Those additional agreements set forth in
Paragraph 8.6;
(j) The Escrow Agreement duly executed by
Seller and the Escrow Agent;
(k) The Required Consents as set forth in
Paragraph 8.7;
(l) The Confidentiality Agreements as set
forth in Paragraph 14.2;
(m) Evidence satisfactory to Buyer that
Intelligraphics has changed its corporate name and
evidence satisfactory to Buyer that Buyer shall
have all rights to any such names.
(n) UCC-3 termination statements, to
terminate all prior UCC filings in connection with
the Assets; and
(o) Such other documents or instruments as
Buyer or its counsel may reasonably request.
11.3. Buyer's Delivery. Subject to the
performance by Seller and Xxxxxxxx of their obligations
hereunder, at the Closing Buyer shall deliver to
Seller:
(a) A certificate executed by a duly
authorized officer of Buyer to the effect that all
warranties and representations of Buyer contained
in this Agreement are true and correct in all
material respects at and as of the date of Closing
and all conditions precedent to the obligations of
Seller to consummate the transaction contemplated
herein have been fulfilled by Buyer or waived by
Seller and Xxxxxxxx;
(b) Opinions of Xxxxxx X. Xxxxxxx, P.C., and
Xxxxxxx & Xxxxxx L.L.C., legal counsel for Buyer,
as described in Paragraph 5.2;
(c) The Estimated Amount, by wire transfer,
and certificates for the Common Stock in the name
of the Voting Trustee (as defined below), and
subject to the Escrow Agreement;
(d) The Executive Employment Agreements,
duly executed by Buyer; and
(e) An assumption in form attached as
Exhibit 11.3(e), and to Buyer and its legal
counsel, under which Buyer shall assume all
executory obligations under the Assumed Contracts.
11.4. Escrow Agreement. At the Closing, Buyer,
Seller and the Escrow Agent shall enter into the Escrow
Agreement. Furthermore, Buyer shall at the Closing
execute and deliver to the Escrow Agent a certificate
for the Subject Shares to be held in escrow by the
Escrow Agent under the terms of the Escrow Agreement as
provided in Paragraph 1.3(b).
11.5. Voting Trust Agreement. Buyer, Seller,
Xxxxxxxx and those persons listed on Exhibit 11.5-1
(the "Additional Holders") shall enter into a Voting
Trust Agreement in the form attached hereto as Exhibit
8.6-1 and, together with the members of the board of
directors of Buyer who are voting trustees under the
Voting Trust Agreement, as Trustee ("Trustee"), a
Voting Trust (the "Voting Trust") for the Subject
Shares referred to in Paragraph 1.3(c). Furthermore,
Buyer shall execute and deliver to the Trustee a
certificate for the Subject Shares to be held by the
Trustee under the terms of the Voting Trust with
respect to the Subject Shares transferred to the Voting
Trust. As provided in the Voting Trust, appropriate
voting trust certificates shall be issued to the
beneficiaries of the Voting Trust. As a condition to
the delivery of the voting trust certificates, Seller
and Xxxxxxxx shall arrange for the execution of such
agreements by the Additional Holders. Buyer
acknowledges and agrees to permit the transfer of the
voting trust certificates as contemplated in the Voting
Trust.
12. Termination. The Agreement may be terminated
prior to Closing only as follows:
(a) by mutual written consent of all parties
hereto;
(b) by any party hereto if the Closing has
not occurred on or before December 31, 1995,
provided that the failure of the Closing to occur
is not due to any breach of this Agreement by the
terminating party;
(c) by Buyer in the event of a substantial
loss of or damage to the Assets or the Business
prior to Closing as the result of theft, fire,
flood, explosion or other casualty, act of God or
otherwise, whether or not covered by insurance, or
a material adverse change in the Business prior to
Closing; or
(d) by Buyer, in the event of a material
breach of any covenant, agreement, warranty, or
representation of Seller, or in the event of a
material change of any representation or warranty,
as set forth in Paragraph 15.19.
Any such termination under the foregoing
paragraphs shall not preclude the terminating party
from seeking any legal or equitable remedy which may be
available as a result of the breach of any warranty,
representation or covenant in this Agreement.
13. Brokers Indemnification; Fees and Expenses.
13.1. Brokers; Indemnification. Buyer represents
and warrants to Seller and Xxxxxxxx and Seller and
Xxxxxxxx, jointly and severally, represent and warrant
to Buyer, that neither of them has employed any broker
or finder in connection with the transactions
contemplated by this Agreement, except as expressly set
forth below. Seller and Xxxxxxxx hereby agree that
they will indemnify and save Buyer harmless, and Buyer
hereby agrees it will indemnify and save Seller and
Xxxxxxxx harmless, from any claim for a commission,
finder's fee or other obligation as a result of anyone
claiming a commission as a broker or finder for the
transactions contemplated by this Agreement, based on
the respective acts of the other.
13.2. Fees and Expenses. Seller and Buyer agree
that they will each bear their own costs and expenses,
including, without limitation, fees and expenses of
counsel, financial advisors, accountants and other
experts in connection with the discussions, due
diligence investigations, negotiations, documentation
concerning this proposed transaction, the preparation
of this Agreement and related documentation and the
consummation of the transaction contemplated herein.
Seller and Xxxxxxxx have engaged Resource Financial
Corporation to act in investment banking and financial
advisory capacities with respect to this transaction.
Buyer, on its part, has retained Xxxxxxx, Xxxxxx Inc.
to render certain financial advisory services in
connection with the proposed transaction. It is agreed
that neither party will be responsible for the fees,
commissions, or expenses payable to either investment
banking firm by the other by reason of this proposed
transaction, and each agrees to indemnify the other
against any such fees, commissions and expenses due and
payable to their respective investment banking firms by
reason of consummation of the transactions contemplated
in this Agreement.
14. Seller's Employees and Benefit Plans.
14.1. On the Closing Date, Seller will terminate
the employment of all of the employees of Seller.
Buyer presently intends, after the Closing Date, to
hire substantially all of the employees employed by
Seller in the Business prior to the Closing Date, but
it is totally within the discretion of Buyer to decide
which (if any) of Seller's current employees will be
offered continued employment and upon what terms and
conditions.
14.2. It is understood by the parties that Buyer
does not guarantee that it will carry over or establish
retirement, savings, health insurance, life insurance,
fringe benefit or other plans or personnel policies or
practices similar or identical to those maintained for
Seller's employees prior to the Closing Date.
15. General Matters.
15.1. Access to Books and Records and Employee
Services. For a period of five (5) years after the
Closing Date, Seller, Xxxxxxxx and Buyer agree that
prior to the destruction of disposition of any books or
records of or to the Business in its possession or
control, such party shall provide not less than ninety
(90) days prior written notice to the other party of
any such proposed destruction or disposal. If such
other party desires to obtain any of such documents, it
may do so by notifying such party in writing at any
time prior to the scheduled date for such destruction
or disposal. Such notice must specify the documents
which such party wishes to obtain. The parties shall
then promptly arrange for the delivery of such
documents. All out-of-pocket costs associated with the
delivery of the requested documents shall be paid by
the receiving party. In addition, the parties agree
that for a period of six months after the Closing,
Buyer will provide Seller with reasonable access to the
services of Xxxxx Xxxxx for the purposes of preparing
tax returns, tax reports and other reports, provided
that such access shall not interfere with Buyer's
business and shall be provided at mutually agreeable
times.
15.2. Best Efforts. The parties covenant,
promise and agree that they will use their best efforts
to consummate the transactions contemplated by this
Agreement, including, without limitation, removing all
conditions precedent to the other party's obligations
at the Closing, and obtaining any and all approvals and
consents, and executing and delivering all documents,
certificates, schedules, exhibits, consents and other
instruments necessary to effect the transfer of the
Assets from Seller to Buyer.
15.3. Binding Effect and Assignment. This
Agreement shall inure to the benefit of and be binding
upon the parties hereto, their successors and
assignees. Neither party shall, without the written
consent of the other party, assign or transfer any of
the rights, benefits, obligations, or other interest
under this Agreement to any other party, which consent
shall not unreasonably be withheld; provided that Buyer
may, at its sole election, assign to a wholly owned
subsidiary its rights to purchase the Assets hereunder,
but in that event Buyer shall not be relieved of its
obligations to perform hereunder.
15.4. Confidentiality. The parties hereto agree
to maintain the confidentiality of the transactions
contemplated hereby and the information contained
herein and in the Exhibits and Schedules attached
hereto and that no disclosure related thereto will be
made other than in order to comply with applicable laws
or other than to such officer, employees and
professional advisors of the parties to the extent
necessary in order for such persons to carry out their
duties with respect to consummation of the transaction
contemplated hereby. All parties acknowledge Buyer, as
a publicly owned company, listed on NASDAQ, and
reporting to the SEC, must comply with applicable SEC
disclosure rules.
15.5. Construction and Representation by Counsel.
The parties hereto represent that in the negotiation
and drafting of this Agreement they have been
represented by and relied upon the advice of counsel of
their choice. The parties affirm that their counsel
had a substantial role in the drafting and negotiation
of this Agreement and, therefore, the rule of
construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any
Exhibit or Schedule attached hereto.
15.6. Counterparts. This Agreement may be
executed in two or more counterparts, each of which
shall be deemed an original, but all of which together
shall constitute one and the same instrument.
15.7. Enforcement of Agreement. In the event of
any lawsuit to enforce the provisions of this
Agreement, the prevailing party shall be entitled to an
award of reasonable attorneys' fees.
15.8. Entire Agreement. This Agreement (and the
other agreements required hereby to be executed and
delivered) embodies the entire agreement of the parties
hereto relating to the subject matter of this Agreement
expressly replacing the non-binding term sheet dated
September 15, 1995, between the parties, except the
Confidentiality Agreement between Seller and Buyer,
which shall terminate if, as and when the Closing
occurs. No amendment or modification of this Agreement
shall be valid or binding upon Buyer unless made in
writing and signed by a duly authorized officer of
Buyer, or upon Seller unless made in writing and signed
by a duly authorized officer of Seller, or upon
Xxxxxxxx unless made in writing and signed by Xxxxxxxx.
15.9. Further Assurances. From time to time, at
the request of Seller or Xxxxxxxx or Buyer and without
further consideration, Seller or Buyer, as appropriate,
will execute and deliver to the other such documents
and take such other action as the other may reasonably
request in order to consummate more effectively the
transactions contemplated hereby. Without limiting the
foregoing, Seller and Xxxxxxxx agree, at any time and
from time to time after the Closing, upon request by
Buyer, to do, execute, acknowledge, and deliver, or to
cause to be done, executed, acknowledged, and
delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and
assurances as may be reasonably required for the better
assigning, granting, transferring, conveying, assuring
and confirming to Buyer, or to its successors and
assigns, or for aiding and assisting in collecting and
reducing to possession, any or all of the Assets to be
sold to Buyer pursuant to this Agreement.
15.10. Governing Law. This Agreement shall be
construed, interpreted and enforced, both as to
substance and remedies, in accordance with the internal
laws of Colorado.
15.11. Notices. All notices, consents, approvals
or other notifications required to be sent by one party
to the other party hereunder shall be in writing and
shall be deemed given to and received by the other
party in all respects when delivered by hand or sent by
reputable overnight delivery service or when
transmitted via facsimile and actually received by the
receiving equipment or two (2) days after the date sent
by United States registered or certified mail, postage
prepaid, with return receipt requested, in each case
addressed to such other party at the address set below,
or the last address of such party as shall have been
communicated to the other party. If a party changes
its address, such party shall give written notice
promptly to the other parties of the new address.
15.12. Notification. Upon the occurrence of any
event, whether by omission, commission or acquiescence,
which causes any of the representations and warranties
contained herein to no longer be true, or which will
prevent any party from performing its covenants or
satisfying the conditions contained herein, the party
whose representation and warranty is no longer true
will give prompt notification in writing to the other
party describing the relevant circumstances in detail.
15.13. Risk of Loss. All risk of loss relating
to the Assets shall remain upon Seller and Xxxxxxxx
through the delivery of the Assets to Buyer at Closing,
in accordance with the terms of this Agreement, at and
after which time Buyer shall bear such risk.
15.14. Paragraph Headings. The parties agree
that the section and article headings are inserted only
for ease of reference, shall not be construed as part
of this Agreement, and shall have no effect upon the
construction or interpretation of any part of this
Agreement.
15.15. Severability. A determination that any
portion of this Agreement is unenforceable or invalid
shall not affect the enforceability or validity of any
of the remaining portions of the Agreement or of this
Agreement as a whole. In the event that any part of
any of the covenants, sections or provisions herein may
be determined by a court of law to be overly broad
thereby making such covenants, sections or provision
invalid or unenforceable, the parties hereto agree, and
it is their desire that, such court shall substitute a
reasonable and judicially enforceable limitation in
place of the invalid and unenforceable part of such
covenants, section or provisions, and that, as so
modified, the covenants, sections or provisions shall
be as fully enforceable as if set forth herein by the
parties themselves in the modified form. If, however,
any court of law shall delete any covenants, sections
or provisions of this Agreement and shall refuse to
substitute any reasonable and judicially enforceable
provisions in their place, the parties shall attempt to
reach agreement with respect to a valid and enforceable
substitute for the deleted provisions, which shall be
as close in its intent and effect as possible to the
deleted portion.
15.16. Survival of Representations and
Warranties. The representations and warranties
contained herein or in any schedule or other
certificate or letter (including letters referred to
herein) delivered by, or on behalf of, any of the
parties pursuant to this Agreement and the transactions
contemplated hereby shall be deemed representations and
warranties by the party by whom, or on whose behalf,
the same is delivered, and all representations and
warranties made by the parties in this Agreement, or
delivered pursuant hereto, are incorporated in and
constitute a part of this Agreement and shall survive
the Closing Date as follows:
(a) The warranties and representations of
Buyer in Paragraphs 4.4 and 4.5 of this Agreement
and of Seller and Xxxxxxxx in Paragraph 3.9 will
survive forever.
(b) All warranties and representations of
Seller and Xxxxxxxx in Paragraphs 3.8, 3.21 and
3.30 will survive for the applicable statute of
limitation, plus thirty (30)days.
(c) All other warranties and representations
of the parties herein or in any agreement or
instrument executed in connection herewith shall
terminate on December 31, 1997.
(d) Notwithstanding the limitations
described in subsections (b) and (c) above, if a
Claiming Party has a reasonable basis for the
belief that a claim for indemnification exists or
will arise and notice regarding such claim is
received in writing by the Indemnifying Party
describing in reasonable detail the facts or
circumstances with respect to the subject matter
of such claim on or before the date on which the
representation, warranty, covenant or agreement on
which such claim or action is or will be based
ceases to survive as set forth in this Section
15.16, such claim will survive irrespective of
whether the subject matter of such claim or action
shall have occurred before, on or after such date.
15.17. Taxes. The parties hereto agree that any
federal, state or local sales or other similar transfer
taxes, levies or assessments (including interest and
penalties relating thereto) resulting from the
consummation of the transactions contemplated hereby
shall be the liability or responsibility of Seller.
15.18. Waiver. The failure of any party to
exercise any of its rights hereunder or to enforce any
of the terms or condition of this Agreement on any
occasion shall not constitute or be deemed a waiver of
that party's rights thereafter to exercise any rights
hereunder or to enforce each and every term and
condition of this Agreement.
15.19. Supplementary Disclosures; Waiver. The
parties acknowledge and agree that all exhibits or
schedules delivered to Buyer by Seller or Xxxxxxxx or
warranties or representations made by Seller or
Xxxxxxxx herein on or prior to the date of this
Agreement may be amended or supplemented in writing by
Seller or Xxxxxxxx, but not later than five (5)
business days prior to the Closing Date; provided, that
if such amendment or supplementation constitutes a
material change, in Buyer's opinion, Buyer may
terminate the Agreement, and will be reimbursed by
Seller upon demand for Buyer's expenses and reasonable
attorneys fees incurred to the date of termination in
connection with this transaction. Buyer shall be
deemed to have accepted such amended or supplemented
exhibit, schedule, warranty or representation unless
Buyer notifies Seller prior to the Closing Date of its
objection to such amendment or supplement. Unless
Buyer so notifies Seller, Buyer shall be deemed to have
waived (i) its rights under Paragraph 12.1 to terminate
this Agreement, and (ii) any claim against Seller or
Xxxxxxxx based on any exhibit, schedule, warranty or
representation as it existed prior to being amended or
supplemented in accordance with the provisions of this
Paragraph 15.19.
16. Dispute Resolution. All disputes arising out
of or related to this Agreement, including any claims
that all or any part of this Agreement is invalid,
illegal, voidable, or void, will be settled by
arbitration, pursuant to an Arbitration Agreement
between Buyer, Seller, the Shareholders, the members of
the board of directors of the Company who are voting
trustees under the Voting Trust Agreement and Bank One,
Colorado, NA dated December 22, 1995.
IN WITNESS WHEREOF, the parties hereto, by and
through their duly authorized representatives have
executed this Agreement, as of the day and year first
above written.
Address for notice: INTELLIGRAPHICS, INC.,
000 X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000 By:/s/ A. Xxxxxxx Xxxxxxxx
Attn.: A Xxxxxxx Xxxxxxxx --------------------------
A. Xxxxxxx Xxxxxxxx, Chairman
and Chief Executive Officer
Address for notice: A. XXXXXXX XXXXXXXX
000 X. Xxxxxxxx
Xxxxx 00
Xxxxxxxx, XX 00000 /s/ A. Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000 -----------------------
Address for notice: ANALYTICAL SURVEYS, INC.,
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 By: /s/ Xxxxxx X. Xxxxxx
Fax: (000) 000-0000 ---------------------
Attn: Xxxxx Xxxxxx Xxxxxx X. Xxxxxx, President
and Chief Executice Officer
