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EXHIBIT 10.12
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STOCK PURCHASE AGREEMENT
Dated as of January 13, 2000
Between
PROGRAPH SYSTEMS, INC.,
and
THE SHAREHOLDERS OF PROGRAMMED SOLUTIONS, INC.
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BACKGROUND ......................................................................... 1
Article I SALE AND PURCHASE OF COMMON STOCK........................................ 1
1.1 Sale and Purchase........................................................... 1
1.2 Closing..................................................................... 1
1.3 The Purchase Price.......................................................... 1
1.4 Announcement Payment........................................................ 1
1.5 Further Cooperation......................................................... 2
Article II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS....................... 2
2.1 Corporate Status; Outstanding Stock......................................... 2
2.2 Due Authorization and Validity of Agreement................................. 3
2.3 Officers, Directors, Bank Accounts, etc..................................... 3
2.4 Subsidiaries and Joint Ventures............................................. 3
2.5 Financial Statements........................................................ 3
2.6 Real Estate................................................................. 3
2.7 Personal Property........................................................... 3
2.8 Accounts Receivable......................................................... 4
2.9 Insurance................................................................... 4
2.10 Liabilities................................................................. 4
2.11 Contracts, Leases, Agreements and Other Commitments......................... 4
2.12 Labor, Employment Contracts and Employee Benefit Plans...................... 5
2.13 Litigation.................................................................. 7
2.14 Conflicting Interests....................................................... 8
2.15 Compliance with Law and Regulations......................................... 8
2.16 Agreement Not in Breach of Other Instruments Affecting PSI;
Governmental Consent........................................................ 8
2.17 Tax Matters................................................................. 9
2.18 Actions Since Balance Sheet Date............................................ 10
2.19 Maintenance of Financial Position........................................... 10
2.20 No Material Adverse Change.................................................. 11
2.21 Statements and Other Documents Not Misleading............................... 11
2.22 Year 2000 Warranty.......................................................... 11
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Article III REPRESENTATIONS AND WARRANTIES OF PROGRAPH............................... 12
3.1 Corporate Status and Authority; Outstanding Stock........................... 12
3.2 Status of Prograph Stock.................................................... 12
3.3 Agreement Not in Breach of Other Instruments Affecting Prograph............. 12
Article IV OTHER AGREEMENTS......................................................... 12
4.1 Continuation and Survival of Representations and Warranties................. 12
4.2 Due Diligence............................................................... 13
4.3 Prograph's Inspection Rights................................................ 13
4.4 Conduct of the Business of PSI Pending Closing.............................. 13
4.5 Post Signing Actions........................................................ 15
Article V CONDITIONS TO CLOSING.................................................... 15
5.1 Conditions Precedent to Prograph's Obligation to Close...................... 15
5.2 Conditions Precedent to the Shareholders' Obligation to Close............... 16
5.3 Closing Deliveries.......................................................... 17
Article VI INDEMNIFICATION.......................................................... 18
6.1 Indemnification by Shareholders............................................. 18
6.2 Prograph Holdback........................................................... 18
6.3 Escrow Arrangements......................................................... 18
6.4 Securityholder Agent of the Shareholders; Power of Attorney................. 21
6.5 Third-Party Claims.......................................................... 21
Article VII SECURITIES LAW COMPLIANCE................................................ 22
7.1 Knowledge Respecting Prograph............................................... 22
7.2 Status of Shares to be Issued............................................... 22
7.3 Prograph Acquisition of the Stock........................................... 23
Article VIII MISCELLANEOUS............................................................ 23
8.1 Further Assurances.......................................................... 23
8.2 Termination................................................................. 24
8.3 Expenses.................................................................... 24
8.4 Indulgences, Waivers, Etc................................................... 24
8.5 Section 338(h)(10) Election................................................. 24
8.6 Controlling Law............................................................. 25
8.7 Notices..................................................................... 25
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8.8 Exhibits and Schedules...................................................... 26
8.9 Binding Nature of Agreement; No Assignment.................................. 26
8.10 No Third-Party Beneficiaries................................................ 27
8.11 Provisions Separable........................................................ 27
8.12 Entire Agreement............................................................ 27
8.13 Amendments and Modifications................................................ 27
8.14 Section Headings and Recitals............................................... 27
8.15 Gender, Etc................................................................. 27
8.16 Waiver of Jury Trial........................................................ 27
8.17 Jurisdiction; Service of Process............................................ 28
8.18 Further Assurances.......................................................... 28
8.19 Survival of Agreements, Representations, Etc................................ 28
8.20 Confidentiality; Publicity.................................................. 28
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, made as of the 13th day of January, 2000,
by and between Prograph Systems, Inc., a Pennsylvania corporation ("Prograph"),
and the shareholders of Programmed Solutions, Inc, a Connecticut corporation
("PSI") set forth on Exhibit A hereto (each, a "Shareholder," and collectively,
the "Shareholders");
BACKGROUND
The Shareholders own all of the issued and outstanding capital stock
(the "Stock") of PSI, which is engaged in the business of designing, producing,
distributing and servicing production and systems management software and
related products for the commercial printing industry (the "Business");
The Shareholders desire to sell to Prograph, and Prograph desires to
purchase from the Shareholders all of the Stock.
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
Article I
SALE AND PURCHASE OF COMMON STOCK
1.1 Sale and Purchase. Subject to the terms and conditions herein set
forth, the Shareholders shall sell, assign and transfer to Prograph and Prograph
shall purchase from the Shareholders 1,000 shares of Common Stock of PSI,
constituting all of the issued and outstanding capital stock of PSI.
1.2 Closing. Subject to the terms and conditions herein set forth, the
closing of the transactions contemplated hereby (the "Closing") shall take place
as soon as practicable after the satisfaction or waiver of each of the
conditions set forth in Article V hereof or at such other time as the parties
hereto agree (the "Closing Date"). The Closing shall take place at Pittsburgh,
Pennsylvania at the offices of Prograph, or at such other location as the
parties hereto agree.
1.3 The Purchase Price. The Aggregate Cash Consideration plus the
Aggregate Prograph shares shall comprise the Aggregate Purchase Price. The Per
Share Purchase Price shall be equal to the quotient of the Aggregate Purchase
Price divided by the total number of shares of Common Stock of PSI outstanding
at the Closing. For purposes of this Agreement, "Aggregate Cash Consideration"
equals $15,000,000.00. "Aggregate Prograph Shares" means 1,697,793 shares of
Prograph Common Stock. Exhibit A hereto sets forth the number of shares of PSI
Common Stock held by each Shareholder and the amount of the Aggregate Cash
Consideration and the number of shares of the Aggregate Prograph Shares to be
issued at the Closing to each Shareholder.
1.4 Announcement Payment. (a) In the event that Prograph wishes to make
a public announcement disclosing the transaction contemplated hereby prior to
the Closing, Prograph shall pay to the Securityholder Agent (as defined below)
for the benefit of the Shareholders, the amount of $1,000,000 in cash.
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1.5 Further Cooperation. From time to time after the Closing, the
Shareholders at Prograph's request and without further consideration, agree to
take or cause to be taken such further or other action as may reasonably be
necessary or appropriate in order to effectuate the transactions contemplated by
this Agreement.
Article II
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
As material inducement to Prograph to enter into this Agreement and to
consummate the transactions contemplated hereby, the Shareholders hereby make
the following representations and warranties to Prograph. Where any documents
are described as having been delivered by PSI to Prograph, such documents have
been identified by signatures of, or inclusion on a Disclosure Schedule mutually
agreed to by, representatives of both parties. Information that must be
described in more than one Schedule shall not be deemed disclosed in a
particular Schedule unless it is disclosed in such Schedule, either expressly or
by a specific incorporation by reference to the relevant portion of another
Schedule. Disclosure of information in a Schedule shall not be deemed to
establish that such disclosure is required -- e.g., that an item is material, if
disclosed in a Schedule that calls for material items.
For the purpose of this Article II only, "knowledge" with respect to PSI
means information that has come to the attention of an officer of PSI and
information that would with reasonable diligence in the ordinary course of the
performance of his or her normal duties come to the attention of an officer of
PSI responsible for verifying the accuracy thereof for purposes of this
Agreement.
2.1 Corporate Status; Outstanding Stock. PSI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Connecticut, has the power and authority to own its properties and to carry on
its business as it is now being conducted, and is duly qualified to do business
as a foreign corporation in the jurisdictions specified in Schedule 2.1, which
constitutes all the jurisdictions in which such qualification is required in
which PSI conducts any business. PSI has an authorized capital consisting of
2000 shares of Common Stock, no par value per share. PSI has shares outstanding
and owned by the Shareholders as set forth on Exhibit A, all of which
outstanding shares are validly issued, fully paid and non-assessable. There are
no shares of PSI's capital stock held in its treasury. There are no options,
warrants, rights, shareholder agreements or other instruments or agreements
outstanding giving any person the right to acquire any shares of capital stock
of PSI, nor are there any commitments to issue or execute any such options,
warrants, rights, shareholder agreements, or other instruments or agreements,
other than those in Schedule 2.1. There are no outstanding stock appreciation
rights or similar rights measured with respect to any of PSI's or any
Subsidiary's capital stock, nor are there any instruments or agreements giving
anyone the right to acquire any such rights, except those listed in Schedule
2.1. The minute books and stock records of PSI are complete and accurate and all
signatures included therein are the genuine signatures of the persons indicated
as signing. True, correct and complete copies of PSI's minute books and stock
records, including PSI's Certificate of Incorporation and By-Laws and all
amendments to both, have been delivered to Prograph. PSI is not in default under
or in violation of any provision of its Certificate of Incorporation or its
By-Laws.
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2.2 Due Authorization and Validity of Agreement. This Agreement has been
duly executed and delivered by each Shareholder and constitutes the valid and
binding obligation of the Shareholders enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, moratorium
and other similar laws affecting creditors' rights generally and by general
principles of equity, whether considered in a proceeding at law or in equity.
2.3 Officers, Directors, Bank Accounts, etc. Schedule 2.3 discloses all
directors and officers of PSI, all bank accounts and safe deposit boxes of PSI
and all persons authorized to sign checks drawn on such accounts and to have
access to such safe deposit boxes.
2.4 Subsidiaries and Joint Ventures. There is no corporation or other
entity in which PSI owns, directly or indirectly, a controlling interest or a
majority of the outstanding shares or other equity interest issued by such
corporation or entity, nor does PSI own any other capital stock, security,
partnership interest or other interest of any kind, either direct or indirect,
in any corporation, partnership, joint venture, association or other entity.
2.5 Financial Statements. The audited balance sheets of PSI as at
December 31, 1997 and December 31, 1998, and the related audited statements of
income and retained earnings and cash flows for the fiscal years then ended, as
well as the unaudited balance sheet as at November 30, 1999 (the "Most Recent
Balance Sheet"), and all related schedules and notes to the foregoing, copies of
all of which constitute Schedule 2.5, were prepared in accordance with generally
accepted accounting principles and practices consistently applied throughout the
periods reported upon and with past periods (except that the unaudited financial
statements do not include footnotes and are subject to normal year-end
adjustments), and fairly present the financial position of PSI as at the dates
of such balance sheets, and the results of the operations and cash flows of PSI
for the periods ended on such dates. The financial statements for the fiscal
year ended on December 31, 1998 were audited by Dylewsky & ▇▇▇▇▇▇▇▇ CPAs, LLC,
certified public accountants whose reports are included with such financial
statements.
2.6 Real Estate. PSI has no right, title or interest in, or any
obligation or duty relating to, any real estate or real property, except for its
interest as a tenant, lessee, subtenant or sublessee under the leases disclosed
on Schedule 2.6 (the "Leases").
2.7 Personal Property.
(a) PSI has good, valid and marketable title to all of the personal
property, tangible and intangible (including, but not limited to Intellectual
Property, as defined below), disclosed on Schedule 2.7, all of which is owned by
it, free and clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, encumbrances and claims of every kind, other
than as disclosed on Schedule 2.7. All equipment, furniture and fixtures, and
other tangible personal property used by PSI in its business is in good
operating condition and repair and does not require any repairs other than
normal routine maintenance to maintain such property in good operating condition
and repair. As used herein, "Intellectual Property" shall include trademarks,
trade names, logos, service marks, copyrights, patents, pending patent
applications, shoprights, know-how, trade secrets, computer programs and
computer software and the like and other items commonly known as intellectual
property.
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(b) PSI is the sole and exclusive owner of the Intellectual
Property disclosed on Schedule 2.7 and possesses all Intellectual Property
rights and licenses required for the conduct of the Business other than
Intellectual Property for which it holds a current license. The Intellectual
Property owned by PSI is listed on Schedule 2.7 and is the only Intellectual
Property that is used by PSI in the operation of its business. Except as
disclosed on Schedule 2.7 no claim has been asserted against PSI involving any
conflict or claim of conflict of its Intellectual Property with the Intellectual
Property of others, and to the knowledge of PSI and the Shareholders there is no
basis for any such claim or conflict.
2.8 Accounts Receivable. Except as set forth on Schedule 2.8, each of
the accounts receivable of PSI reflected on the Most Recent Balance Sheet
represents a valid claim in the full amount thereof against the debtor charged
therewith on the books of PSI and was acquired in the ordinary course of PSI's
business, and no such account receivable arose from any transaction with the
United States or any department or agency thereof. To PSI's and the
Shareholders' knowledge, no account debtor has any valid set-off, deduction or
defense with respect thereto and no account debtor has asserted any such
set-off, deduction or defense.
2.9 Insurance. PSI maintains insurance policies bearing the numbers, for
the terms, with the companies, in the amounts, having the named insureds,
providing the general coverage, and with the premiums disclosed on Schedule 2.9.
All of such policies are in full force and effect; PSI is not in default of any
provision thereof and all premiums due (without regard to any grace period) with
respect to such policies have been paid. PSI has not been refused any insurance
for which it has applied and has not received notice from any issuer of any
policy issued to it of the insurer's intention to cancel or refusal to renew any
such policy issued by such insurer. The Shareholders believe that such policies
are substantially similar to those carried by corporations of established
reputations engaged in the same or similar business as is PSI as regards the
hazards insured against and the amounts of coverage. PSI and the Shareholders
believe that the amount of such insurance is adequate. True, correct and
complete copies of all such policies have been delivered to Prograph.
2.10 Liabilities. On the date of the Most Recent Balance Sheet, PSI had,
and as of the date hereof, PSI has, no liabilities, whether related to tax or
non-tax matters, known or unknown, due or not yet due, liquidated or
unliquidated, fixed, contingent, or otherwise, including penalty, acceleration
or forfeiture clauses in any contract, except (a) as and to the extent disclosed
in the Most Recent Balance Sheet or in Schedule 2.10, (b) to the extent not
required by generally accepted accounting principles to be set forth on a
balance sheet, or (c) as incurred since the date of the Most Recent Balance
Sheet (the "Balance Sheet Date") in the ordinary course of business.
2.11 Contracts, Leases, Agreements and Other Commitments.
(a) PSI is not a party to or bound by any written, oral or implied
contract, agreement, lease, power of attorney, guaranty, surety arrangement or
other commitment, including but not limited to any contract or agreement for the
purchase or sale of merchandise or for the rendition of services, except for the
following (which are hereinafter collectively called the "PSI Agreements") (and
for the purpose of this Subsection, PSI shall be considered "bound" by any
lease, mortgage or other encumbrance which is binding on any of its Real
Properties even though it is not personally binding upon PSI):
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(i) Leases described on Schedule 2.6;
(ii) agreements involving a maximum possible liability or
obligation per agreement on the part of PSI of less than $5,000 each and less
than $20,000 in the aggregate;
(iii) customer license agreements in the standard forms
delivered to Prograph, any exceptions to which are set forth on Schedule
2.11(a)(iii);
(iv) employment-related agreements disclosed on Schedule 2.12;
and
(v) agreements listed on Schedule 2.11(a)(v).
(b) True, correct and complete copies of all of the PSI Agreements
(including all amendments thereto) have been delivered to or otherwise made
available to Prograph. PSI's customer agreements cover at least 750 distinct
sites.
(c) All of the PSI Agreements are in full force and effect and are
valid, binding and enforceable against the respective parties thereto in
accordance with their respective terms. Except as disclosed on Schedule 2.11,
PSI and all other parties to all of the PSI Agreements have performed all
obligations required to be performed to date under the PSI Agreements and
neither PSI nor any such other party is in default or in arrears under the terms
thereof, and (to the Shareholders' knowledge with respect to defaults of other
parties thereto) no condition exists or event has occurred which, with the
giving of notice or lapse of time or both, would constitute a default
thereunder. Except as explicitly set forth in Schedule 2.11(c), the execution
and delivery of this Agreement, the consummation of the transactions provided
for herein and the fulfillment of the terms hereof by PSI do not and will not,
with or without the giving of notice, the lapse of time, or both, result in the
breach of any of the terms and provisions of, or constitute a default under, or
conflict with, or cause any acceleration of, any obligation of PSI under, any
PSI Agreement. None of the terms or provisions of any PSI Agreement materially
adversely affects, or with the passage of time may materially adversely affect,
the business, prospects, conditions, affairs or operations of PSI or any of its
properties or assets. Except as set forth in Schedule 2.18(g), PSI is not aware
of any intention by any party to terminate or amend any PSI Agreement or, if PSI
intends to request a renewal, of any intention to refuse to renew the same upon
expiration of its term.
(d) Schedule 2.11 discloses (i) all outstanding written and oral
proposals, bids, offers or guaranties made by PSI which, if accepted, would or
could impose any debts, obligations or liabilities upon PSI, and (ii) unexpired
warranties relating to PSI's products or services, detailing the products or
services covered by each warranty, other than those contained in the standard
form customer license agreements of PSI.
2.12 Labor, Employment Contracts and Employee Benefit Plans. Except as
disclosed on Schedule 2.12:
(a) PSI is not a party to any written or oral employment
agreement, consulting agreement, personal service agreement or agreement with
any independent contractor, and there are no actual or threatened controversies
related to or arising out of any such existing or alleged agreements. PSI is not
a party to any pending or threatened labor dispute. PSI has performed all
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obligations, given all notices and obtained all consents necessary under such
agreements to consummate this Agreement.
(b) PSI is not a party to any collective bargaining agreement. With
respect to employees of PSI none of the following events or circumstances exists
and none is threatened: a controversy, a claim of illegal or improper conduct or
activities, an unresolved grievance or charge of unfair labor practice, an
arbitration proceeding or a union organizing effort. PSI has not received notice
of any claim that it has not complied with any applicable law or regulation
relating to the employment of labor, including any provisions thereof relating
to wages, hours, collective bargaining, the payment of social security and
similar taxes, retirement plans, health and welfare plans, equal employment
opportunity, employment discrimination and employment safety, or that the PSI is
liable for any arrears of wages or any taxes or penalties or interest for
failure to comply with any of the foregoing. PSI has not been the subject of any
organizational efforts by any labor organizing, strike, work stoppage, "sickout"
or picketing by any group of persons (whether or not employees).
(c) PSI has complied with the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and all other laws relating to the employment
of labor or provision of employee benefits, including any provisions thereof
relating to wages, hours, benefits, pensions, safety, discrimination, the filing
of all reports and forms required to be filed with state or federal agencies,
collective bargaining, recognition and dealing with labor organizations, and the
payment of social security and unemployment compensation taxes, the withholding
of income tax, and the payment and withholding of similar taxes. PSI is not
liable for any arrearages of wages, taxes, benefit payments or contributions, or
penalties or interest for failure to comply with any of the foregoing.
(d) There is no employee benefit plan that PSI maintains or to
which it contributes, except as disclosed in Schedule 2.12. Each employee
benefit plan disclosed in Schedule 2.12, and each related trust, insurance
contract or fund, complies in form and in operation with the applicable
requirements of ERISA, the Internal Revenue Code of 1986, as amended (the
"Code"), and other applicable laws. PSI has never maintained, sponsored or
contributed to an employee pension plan that is or was subject to Title IV of
ERISA.
(e) Except as explicitly set forth on Schedule 2.12(g), all reports
and descriptions (including Form 5500 Annual Reports, Summary Annual Reports,
PBGC-1s, and Summary Plan Descriptions) required of PSI with respect to each
employee benefit plan disclosed in Schedule 2.12, have been timely filed or
distributed in compliance with the requirements of applicable law. The
requirements of Part 6 of Subtitle B of Title I of ERISA and of Section 4980B of
the Code have been met with respect to each such employee benefit plan which is
an employee benefit plan described in Section 3(l) of ERISA.
(f) All contributions (including all employer contributions and
employee salary reduction contributions) which may be required to be made in
accordance with the employee benefit plans and, when applicable, Section 302 of
ERISA or Section 412 of the Code have been or will be timely paid to each
employee benefit plan disclosed in Schedule 2.12, for all periods ending on or
before the Closing; contributions which are not yet due have been paid to each
such employee benefit plan or accrued in accordance with the past custom and
practice of PSI. All
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premiums or other payments for all periods ending on or before the date hereof
have been paid with respect to each such employee benefit plan that is described
in Section 3(l) of ERISA.
(g) Each employee benefit plan disclosed in Schedule 2.12, that is
intended to meet the requirements of a "qualified plan" under Section 401(a) of
the Code satisfies the requirements of Section 401(a) of the Code and has
received, within the last two years, a favorable determination letter from the
Internal Revenue Service.
(h) There have been no prohibited transactions (as defined in ERISA
Section 406 and Section 4975 of the Code) with respect to any employee benefit
plan. No fiduciary (as defined in ERISA) has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any employee benefit plan. No
action, suit, proceeding, hearing or investigation with respect to the
administration or the investment of the assets of any employee benefit plan
(other than routine claims for benefits) is pending or, to the knowledge of PSI
threatened. To the knowledge of PSI, there is no basis for any such action,
suit, proceeding, hearing or investigation.
(i) PSI does not maintain, has never maintained, and does not
contribute to, has never contributed to, and never has been required to
contribute to any employee benefit plan providing medical, health, or life
insurance or other welfare-type benefits for current or future retired or
terminated employees, their spouses, or their dependents (other than in
accordance with Section 4980B of the Code). No person who is not a current or
former employee (or a beneficiary thereof) of PSI participates or is entitled to
any benefits under any plan disclosed on Schedule 2.12.
(j) Subject to the limitations set forth in Section 6.2, the
Shareholders agree, jointly and severally, to indemnify and hold Prograph and
its Affiliates harmless from any loss, expense, liability, claim or obligation
(including attorneys' fees), which relates to periods ending on or prior to the
Closing, and which in any way arises as a result of, under or with respect to:
(a) the employee benefits and employee benefit plans (as the term is defined in
Section 3(3) of ERISA) which have been or are maintained, sponsored or
contributed to by PSI, (b) post-employment benefits, including but not limited
to retiree medical, retiree life and retiree accidental death and disability
benefits for current and former employees of PSI and (c) the requirement to
provide any employee of PSI who is terminated on or prior to the Closing with
continuation coverage under the requirements of Section 4980B of the Code
(Prograph acknowledging, however, that pursuant to law PSI may have an
obligation to provide, at the employees' expense, continuation health insurance
coverage to such employees who were covered by health insurance provided by PSI
prior to the Closing). The term "Affiliate" as used in this Agreement shall have
the meaning given to such term under the Securities Exchange Act of 1934, as
amended.
2.13 Litigation. Except as disclosed on Schedule 2.13, PSI is not a
party to or threatened with any suit, action, arbitration, or administrative or
other proceeding, either at law or in equity, or governmental investigation, by
or before any court, governmental department, commission, board, agency or
instrumentality, domestic or foreign; to the best of PSI's and the Shareholders'
knowledge, there is no basis for any suit, action, arbitration, or
administrative or other proceeding against PSI which could is likely to,
individually or in the aggregate, have a
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material adverse effect on the business, assets, condition (financial or
otherwise), operations or prospects of PSI; there is no judgment, decree, award
or order outstanding against PSI; and PSI is not contemplating the institution
by it of any suit, action, arbitration or administrative or other proceeding.
2.14 Conflicting Interests. Except as disclosed on Schedule 2.14, no
director, officer or employee of PSI and no Shareholder or any ancestor,
sibling, descendant or spouse of any such persons, or any trust, partnership or
Affiliate of any of the foregoing (a) has any pecuniary interest in any supplier
or customer of PSI or in any other business enterprise with which PSI conducts
business or with which PSI is in competition; (b) is indebted to PSI for money
borrowed; (c) is a party to any transaction or agreement with PSI (apart from
such person's status as an employee or stockholder as such); or (d) has any
business or other interest in conflict with the interests of PSI.
2.15 Compliance with Law and Regulations. Except as shown on Schedule
2.15, PSI is in compliance and has at all times during the past five (5) years
complied in all material respects with all requirements of law, federal, state
and local, and all requirements of all governmental bodies or agencies having
jurisdiction over it, the conduct of its business, the use of its properties and
assets, and all premises occupied by it. Without limiting the foregoing, PSI has
obtained and now holds all licenses, permits, certificates and authorizations
needed or required for the current conduct of its business and the use of its
properties and the premises occupied by it, the failure of which to obtain or
hold would not have a material adverse effect on PSI's assets or business. PSI
has properly filed all material reports and other documents required to be filed
with any federal, state, local and foreign government or subdivision or agency
thereof. PSI has not received any notice, not heretofore complied with, from any
federal, state or local authority or any insurance or inspection body that any
of its properties, facilities, equipment, or business procedures or practices
fails to comply with any applicable law, ordinance, regulation, building or
zoning law, or requirement of any public authority or body. All licenses,
permits, orders and approvals issued by any governmental body or agency
currently in effect and pertaining to the property, assets or business of PSI
are disclosed on Schedule 2.15. To the knowledge of PSI and the Shareholders,
there are no regulations or legislation pending before any federal, state, local
or foreign government agency, administrative body or legislature which, if
adopted, would have a material adverse effect on PSI's business.
2.16 Agreement Not in Breach of Other Instruments Affecting PSI;
Governmental Consent. Except as disclosed on Schedule 2.16, the execution and
delivery of this Agreement, the consummation of the transactions provided for
herein, and the fulfillment of the terms hereof: (a) will not, with or without
the giving of notice, the lapse of time, or both, result in the imposition of
any lien, security interest or encumbrance on any asset of PSI or in the breach
of any of the terms and provisions of, or result in a termination, impairment or
modification of or constitute a default under, or conflict with, or cause any
acceleration of any obligation of PSI under, or permit any other party to modify
or terminate, any agreement, indenture or other instrument by which PSI is
bound, PSI's Certificate of Incorporation or Bylaws, any judgment, decree,
order, or award of any court, governmental body, or arbitrator, or any
applicable law, rule or regulation, (b) do not require the consent of any
governmental authority or other person, and (c) will not result in any
limitation or restriction of any right of PSI.
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2.17 Tax Matters.
(a) "Taxes" shall mean any tax (whether income, excise, customs,
sales or use, value added, ad valorem, real or personal property, license,
transfer, employment, social security or any other kind of tax or payment in
lieu of tax no matter how denominated), or any assessment, levy, impost,
withholding, or other governmental charge in the nature of a tax, and shall
include all additions to tax, interest, penalties and fines with respect
thereto; and "Returns" shall mean all reports, estimates, information statements
and returns of any nature, including amended versions of any of the foregoing,
relating to or required to be filed in connection with any Taxes pursuant to the
statutes or regulations of any federal, state, local or foreign government
taxing authority.
(b) PSI has filed all Returns that are required to be filed by it.
All such Returns are true, correct and complete in all material respects as of
their respective filing dates. All Taxes for which PSI is liable and that are
due (including, without limitation, Taxes shown to be due on all filed Returns)
have been paid, and all Taxes that are required to be withheld or collected by
PSI have been duly withheld and collected and, to the extent required, have been
paid to or accrued on the Most Recent Balance Sheet for the benefit of the
appropriate governmental authority or properly deposited as required by
applicable law, rule or regulation.
(c) No taxing authority has asserted or, to the knowledge of PSI or
any Shareholder, threatened to assert any adjustment, deficiency or assessment
for any Taxes against PSI; to the knowledge of PSI and each Shareholder, no
basis exists for any such adjustment, deficiency or assessment; and to the
knowledge of PSI and each Shareholder, there is no audit or investigation
pending or, to the knowledge of PSI and each Shareholder, threatened by any
taxing authority with respect to any liability for Taxes of PSI.
(d) Except as disclosed on Schedule 2.17, PSI has no taxable income
or gain that may be reportable for a period ending after the Closing, but which
is attributable to a transaction occurring, or a change in accounting method
made for a period ending, at or prior to the Closing, which may result in
deferred reporting of income or gain from such transaction or from such change
in accounting method.
(e) There are no currently outstanding requests made by PSI for tax
rulings, determinations or information that could affect the Taxes of PSI.
(f) Schedule 2.17, discloses all Returns filed with respect to PSI
for taxable periods ending on or after December 31, 1998, and all Returns (if
not for taxable periods) filed since December 31, 1998. PSI has delivered to
Prograph complete and accurate copies of all such Returns.
(g) PSI has not been obligated to deduct and withhold Taxes under
Section 1441 or 1442 of the Code.
(h) No consent under Section 341(f) of the Code has been filed with
respect to PSI.
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(i) PSI is not a party to any agreement or arrangement that would
result in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code.
(j) PSI has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(k) PSI has made a valid election under the Code to be treated as
an S corporation effective for all taxable years of PSI since December 1987, and
PSI's status as an S corporation for federal income tax purposes has not been
terminated for any reason and has remained valid during the period since such
date to and including the Closing Date..
2.18 Actions Since Balance Sheet Date. Except as disclosed on Schedule
2.18, since the Balance Sheet Date to the date hereof, PSI:
(a) has not taken any action outside of the ordinary and usual
course of business;
(b) has not borrowed any money or become contingently liable for
any obligation or liability of others;
(c) has paid all of its debts and obligations as they became due;
(d) has not incurred any debt, liability or obligation of any
nature to any party, outside the ordinary and usual course of business
consistent with past practice;
(e) has not knowingly waived any right of material value;
(f) has used its best efforts to preserve its business organization
intact, to keep available the services of its employees, and to preserve its
relationships with its customers, suppliers and others with whom it deals;
(g) has not lost the services of any employee and has not sustained
a termination of its relationship with any customer, supplier or other person
with whom it deals, and no such termination is anticipated; and
(h) has not purchased or redeemed any shares of capital stock of
PSI, or transferred, distributed or paid, directly or indirectly, any money or
other property or assets to any stockholder or to any other person, other than
payment of liabilities shown on the Most Recent Balance Sheet on or after the
scheduled maturity or due date thereof, payment of compensation for services
actually rendered at rates not in excess of the rates prevailing on the Balance
Sheet Date, payments due under PSI Agreements, and payments in the ordinary
course of business for goods and services in arm's length transactions.
2.19 Maintenance of Financial Position. Except as set forth on Schedule
2.19, of the date hereof, (a) the excess of current assets over current
liabilities of PSI, as such current assets and current liabilities are shown on
the Most Recent Balance Sheet, is at least equal to the amount thereof shown on
the Most Recent Balance Sheet; (b) the book value of the fixed assets of PSI is
at least equal to the book value thereof shown on the Most Recent Balance Sheet
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(except for depreciation accrued, in accordance with generally accepted
accounting principles applied in a manner consistent with past periods, by
reason of the passage of time); and (c) the tangible net worth (being the excess
of all assets after taking depreciation into account, other than goodwill and
other intangible assets, over all liabilities) of PSI is at least equal to the
amount thereof shown on the Most Recent Balance Sheet.
2.20 No Material Adverse Change. Since the Balance Sheet Date to the
date hereof, there has not been, and there is not threatened, any material
adverse change in the financial condition, business, prospects or affairs of PSI
or any material physical damage or loss to any of PSI's properties or assets or
to the premises occupied by PSI (whether or not such damage or loss is covered
by insurance).
2.21 Statements and Other Documents Not Misleading. Neither this
Agreement, including all Schedules, nor the Closing documents furnished by PSI
or the Shareholders to Prograph in connection with the transactions contemplated
hereby contains or will contain any untrue statement of any material fact or
omits or will omit to state any material fact necessary to be stated in order to
make any statement contained therein not misleading. There is no fact known to
PSI or to any Shareholder which materially adversely affects PSI's business,
prospects, financial condition or affairs or any of its properties or assets
which has not been set forth in this Agreement, including the Schedules
furnished by PSI on or prior to the date hereof in connection with the
transactions contemplated hereby.
2.22 Year 2000 Warranty. Except as set forth on Schedule 2.22, PSI's
software, the technology used in PSI's business and all updates thereto are
designed to correctly handle the change of the century, including the year 2000
and beyond as well as the leap year and the absence of leap year, and will
operate accurately before, during and after the year 2000 with respect to
date/time related operations. Without limiting the foregoing, PSI's software
will operate and correctly process data such that (a) calculations using dates
are executed utilizing a four digit year, (b) the software functionality,
including, but not limited to, entry, inquiry, maintenance, update and display
(whether on-line, batch or otherwise) shall support four digit year processing
(it being understood that certain date fields in certain PSI software products
display two-digit years only, but are nevertheless Y2K compliant), (c) reports
and interfaces with other PSI software shall support four digit year processing
and shall otherwise meet the requirements of this subsection, (d) use of the
correct system date shall occur without human intervention, (e) processing with
a four digit year shall occur without human intervention, (f) all leap years
shall be calculated correctly, and (g) correct results shall be produced in
forward and backward date calculations spanning century boundaries, including
the conversion of previous years currently stored as two digits.
For purposes hereof, "Software" means the intangible languages,
programs, operating systems, compilers and assemblers that cause a computer to
perform in an expected manner, including the media on which such information is
stored.
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Article III
REPRESENTATIONS AND WARRANTIES OF PROGRAPH
As material inducement to the Shareholders to enter into this Agreement
and to consummate the transactions contemplated hereby, Prograph makes the
following representations and warranties to the Shareholders:
3.1 Corporate Status and Authority; Outstanding Stock. Prograph is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania and has the corporate power to enter into
and consummate the transactions contemplated by this Agreement. The authorized
capital stock of Prograph is as set forth on Schedule 3.1, and consists of
16,971,000 shares on a fully diluted basis. Prograph has, and will continue to
have at all times until Closing hereunder, a sufficient number of authorized but
unissued shares of Common Stock to be able to issue all of the shares of
Prograph Stock which are to be issued hereunder. The execution, delivery and
performance of this Agreement by Prograph have been duly authorized by all
necessary corporate action on the part of Prograph, and this Agreement has been
duly executed and delivered by and constitutes the valid and binding obligation
of Prograph, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium and other
similar laws affecting creditors' rights generally and by general principles of
equity, whether considered in a proceeding at law or in equity.
3.2 Status of Prograph Stock. The shares of Prograph Stock, when issued
pursuant to the terms of this Agreement, will be duly authorized, validly issued
and outstanding, fully paid and non-assessable.
3.3 Agreement Not in Breach of Other Instruments Affecting Prograph.
Except as set forth in Schedule 3.3, the execution and delivery of this
Agreement the consummation of the transactions provided for herein by Prograph
do not and will not, with or without the giving of notice, the lapse of time or
both, result in the breach of any of the terms and provisions of, or constitute
a default under, or conflict with or cause any acceleration of any obligation of
Prograph under, or require any consent under, any agreement, indenture or other
instrument by which Prograph is bound, Prograph's Articles of Incorporation or
Bylaws, any judgment, decree, order or award of any court, governmental body or
arbitrator, or any applicable law, rule or regulation.
3.4 Statements and Other Documents Not Misleading. Neither this
Agreement, including all Schedules, nor the Closing documents furnished by
Prograph to the PSI Shareholders in connection with the transactions
contemplated hereby, nor Prograph's Confidential Offering Memorandum, dated
December 1999 (as supplemented from time to time) (as so supplemented, the
"Prograph Memorandum"), contains or will contain any untrue statement of any
material fact or omits or will omit to state any material fact necessary to be
stated in order to make any statement contained therein not misleading. There is
no fact known to Prograph which materially adversely affects Prograph's
business, prospects, financial condition or affairs or any of its properties or
assets which has not been set forth in the Prograph Memorandum or this
Agreement, including the Schedules furnished by Prograph on or prior to the date
hereof in connection with the transactions contemplated hereby.
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Article IV
OTHER AGREEMENTS
4.1 Continuation and Survival of Representations and Warranties. All
representations and warranties, including information disclosed in Schedules,
made in this Agreement shall continue to be true and correct at and as of the
Closing Date and at all times between the signing of this Agreement and the
Closing Date, as if made at each of such times; provided, however, that at
Closing the Shareholders may deliver to Prograph modifications of the Schedules
to reflect changes thereto arising in the ordinary course of its Business since
the date hereof, provided further that none of such changes, either individually
or in the aggregate, is materially adverse to the Business or financial
condition of PSI. If any party hereto shall learn of a representation or
warranty being or becoming untrue at or prior to Closing, such party shall
promptly give notice thereof to all of the other parties hereto. All
representations and warranties contained herein shall survive the consummation
of the transactions provided for in this Agreement for a period of one year from
the Closing and shall provide the basis for the remedies set forth herein or
otherwise available to the non-breaching party. Each covenant contained herein
shall survive the Closing until fulfilled or expressly waived. Each
representation and warranty contained herein is independent of all other
representations and warranties contained herein (whether or not covering an
identical or a related subject matter) and must be independently and separately
complied with and satisfied. No representation or warranty contained herein
shall be deemed to have been waived, affected or impaired by any investigation
made by or knowledge of any party to this Agreement.
4.2 Due Diligence. The parties agree to use reasonable commercial
efforts to: (a) provide reasonably requested due diligence materials to the
other party as promptly as practicable after receipt of the other party's
request, and (b) complete their due diligence review of the other party no later
than January 21, 2000, subject to timely provision of requested due diligence
material by the other party.
4.3 Prograph's Inspection Rights. PSI shall give to Prograph and its
designated employees or representatives full access to all of the properties and
assets of PSI, to PSI's stock books, and to all of PSI's documents, books and
records relating to its current and past operations and Business. PSI shall
permit such employees and representatives to make copies of PSI's written
materials and to interview and question PSI's employees upon reasonable notice,
during regular business hours and without unnecessary disruption of PSI's
operations. Prograph will not reveal any confidential data and/or information
supplied by PSI except to its management, counsel, accountants, insurance
representatives, investment bankers and like agents, for purposes relating to
the evaluation and consummation of the transactions contemplated by this
Agreement, and in the event the transactions contemplated by this Agreement are
not consummated, such data and information will not be used by Prograph and will
be returned to PSI.. The Shareholders acknowledge receipt of the executed term
sheets for the financings by (i) certain current Prograph shareholders and (ii)
by Creo. The Shareholders shall have the right to make such inquiry of Prograph
concerning its business, capital structure and financing initiatives as shall be
necessary or appropriate for them to evaluate their prospective investment in
Prograph.
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4.4 Conduct of the Business of PSI Pending Closing. Between the date
hereof and the Closing hereunder, PSI shall:
(a) not take or suffer or permit any action which would render
untrue any of the representations or warranties of PSI herein contained, and not
omit to take any action, the omission of which would render untrue any such
representation or warranty;
(b) conduct its Business in a good and diligent manner in the
ordinary and usual course;
(c) not enter into any contract, agreement, commitment or
arrangement with any party, other than contracts for the sale of merchandise or
services and contracts for the purchase of materials, services and supplies in
the ordinary and usual course of its Business, and not amend, modify or
terminate any PSI Agreement without the prior written consent of Prograph;
(d) use its best efforts to preserve its Business organization
intact, to keep available the services of its employees, and to preserve its
relationships with customers, suppliers and others with whom it deals;
(e) not reveal, orally or in writing, to any party, other than
Prograph and Prograph's authorized agents, any of the procedures and practices
followed by it in the conduct of its Business or any technology used in the
processing, evaluation or manufacture of any of its products or rendering its
services;
(f) maintain in full force and effect all of the insurance policies
listed on Schedule 4.4(f) and make no change in any insurance coverage without
the prior written consent of Prograph;
(g) keep the premises occupied by it and all of its equipment and
other tangible personal property in good order and repair and perform all
necessary repairs and maintenance;
(h) continue to maintain all of its usual Business books and
records in accordance with its past practices;
(i) not amend its Certificate of Incorporation or Bylaws;
(j) not declare or make any dividend or other payment on or with
respect to its capital stock, redeem or otherwise acquire any shares of its
capital stock or issue any capital stock or any option, warrant or right
relating thereto;
(k) not waive any right or cancel any claim;
(l) not increase the compensation or rate of compensation payable
to any of its employees;
(m) maintain its corporate existence and not merge or consolidate
with any other entity;
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(n) comply with all provisions of any PSI Agreement applicable to
it and all applicable laws, rules and regulations;
(o) not make any capital expenditure outside of the ordinary course
of business; and
(p) use its best efforts to obtain any necessary third party
consents and take other actions in order to consummate the transactions
contemplated by this Agreement.
4.5 Post Signing Actions. Both parties hereto shall take all reasonable
steps to deliver any of the Exhibits or Schedules or ancillary agreements called
for herein after the date hereof as promptly as possible prior to the Closing.
Article V
CONDITIONS TO CLOSING
5.1 Conditions Precedent to Prograph's Obligation to Close. The
following shall be conditions precedent to the obligation of Prograph to close
hereunder, any of which may be waived in whole or in part by Prograph:
(a) Each of the representations and warranties of the Shareholders
contained in this Agreement are now and, except as to those expressly limited to
the date hereof or some other specific date, and except for those covered by
Section 5.1(c) below, at all times after the date of this Agreement to and
including the time of Closing shall be, true and correct in all material
respects.
(b) Each of the agreements, covenants and undertakings of the
Shareholders contained in this Agreement, except for those calling for
performance after Closing, will have been fully performed and complied with in
all material respects at or before Closing.
(c) No litigation, governmental actions or other proceeding
involving or potentially involving a liability, obligation or loss on the part
of PSI of $20,000 or more, in the aggregate, or which by reason of the nature of
the relief sought might have a material adverse effect on PSI's Business or
financial condition, shall be threatened or commenced against PSI with respect
to any matter; no litigation, governmental action or other proceeding shall be
threatened or commenced against PSI or any Shareholder with respect to the
consummation of the transactions provided for herein.
(d) All indebtedness owing to PSI by any director, officer,
employee or Shareholder of PSI will be paid in full at or prior to Closing,
except for the debt described on Schedule 5.1(d).
(e) All actions, proceedings, instruments and documents required to
enable PSI and the Shareholders to perform this Agreement or matters incident
thereto (other than matters for which Prograph is responsible under the terms of
this Agreement), and all other legal matters not relating to a default by
Prograph of its obligations hereunder, shall have been duly taken, satisfied,
executed or delivered, as the case may be, to the reasonable satisfaction of
Prograph.
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(f) All documents required to be delivered by the Shareholders at
or prior to Closing shall have been delivered or shall be tendered at the time
and place of Closing.
(g) Each of the Shareholders listed on Schedule 5.1(g) shall have
executed and delivered at the Closing Employment Agreements with Prograph in the
form of Exhibit B hereto.
(h) The Stockholder Agreement dated as of January 4, 1999, among
PSI and the Shareholders shall have been terminated with no further force or
effect.
(i) PSI and the Shareholders shall have tendered the Closing
deliverables specified in Section 5.3(a) below.
(j) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., counsel to the
Shareholders, shall have delivered an opinion or opinions to Prograph relating
to such matters as Prograph and its counsel shall reasonably request.
5.2 Conditions Precedent to the Shareholders' Obligation to Close. The
following shall be conditions precedent to the obligation of the Shareholders'
to close hereunder, any of which may be waived in whole or in part by the
Shareholders:
(a) Each of the representations and warranties of Prograph
contained in this Agreement are now and, except as to those expressly limited to
the date hereof or some other specific date at all times after the date of this
Agreement to and including the time of Closing shall be, true and correct in all
material respects.
(b) Each of the agreements, covenants and undertakings of Prograph
contained in this Agreement, except for those calling for performance after
Closing, will have been fully performed and complied with in all material
respects at or before Closing.
(c) No litigation, governmental actions or other proceeding
involving or potentially involving a liability, obligation or loss on the part
of Prograph of $20,000 or more, in the aggregate, or which by reason of the
nature of the relief sought might have a material adverse effect on Prograph's
Business or financial condition, shall be threatened or commenced against
Prograph with respect to any matter; no litigation, governmental action or other
proceeding shall be threatened or commenced against Prograph or any of its
shareholders with respect to the consummation of the transactions provided for
herein.
(d) Prograph shall have executed and delivered at the Closing
Employment Agreements with each of the Shareholders set forth on Schedule 5.1(g)
in the form of Exhibit B hereto.
(e) The financing contemplated by the Prograph Memorandum shall
have been consummated on terms substantially as beneficial to Prograph and the
Shareholders as the terms set forth in the term sheet delivered to the
Shareholders prior to the date hereof.
(f) ▇▇▇▇▇▇▇ D'▇▇▇▇▇▇, Esq., counsel to Prograph, shall have
delivered an opinion or opinions to the Shareholders relating to such matters as
the Shareholders and their counsel shall reasonably request.
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(g) Prograph shall have tendered the Closing deliverables specified
in Section 5.3(b) below.
5.3 Closing Deliveries.
(a) Deliveries by the Shareholders at Closing. At Closing, the
Shareholders will deliver or cause to be delivered to Prograph the following:
(i) certificates of the President of PSI, dated as of the
Closing Date, confirming (1) the truth and correctness of all of the
representations and warranties of PSI contained in Article II herein as of the
Closing Date and as of all times between the date hereof and the Closing Date,
and (2) that all agreements and covenants of PSI specified herein have been
complied with, and (3) that no Shareholder has exercised or taken any action
with a view to exercising any rights of rescission under the Pennsylvania
Securities Act of 1972, as amended, with respect to the transactions
contemplated hereby;
(ii) the signed resignations of all directors and all officers
of PSI dated and effective as of the Closing Date;
(iii) the stock books and records, corporate minute books
(containing the originals of all minutes and resolutions ever adopted or
consented to or agreed to by the shareholders, directors or any committee of
directors of PSI) and the corporate seal of PSI;
(iv) a "good standing" certificate for PSI for each
jurisdiction PSI is registered to do business in and a certified copy of the
Certificate of Incorporation and all amendments thereto issued by the Department
of State of Connecticut and dated as of a date within fifteen (15) days prior to
the Closing Date;
(v) a Certification by each Shareholder pursuant to the
Foreign Investment Real Property Tax Act, in the form attached hereto as Exhibit
D;
(vi) certificates representing all of the Stock, together with
duly endorsed in blank stock powers;
(vii) consents executed by all necessary parties whose consent
to the transactions contemplated hereby is required under the terms of the PSI
Agreements, or PSI's licensees or rights. Such consents are described on
Schedule 5.3(a)(vii) hereto; and
(viii) the Employment Agreements, duly executed by the
Shareholders who are party thereto.
(b) Deliveries by Prograph at Closing. At the Closing, Prograph
will deliver or cause to be delivered to the Shareholders the following:
(i) wire transfers or bank checks in amounts equal to the
respective cash portions of the Purchase Price payable to each Shareholder;
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(ii) certificates for the Aggregate Prograph Shares which
shall be validly issued, fully paid and non-assessable Prograph Stock registered
in the names of the Shareholders in accordance with their respective interests
as set forth on Exhibit A;
(iii) the Certificate of the President of Prograph, dated the
Closing Date, confirming the truth and correctness of all of the representations
and warranties of Prograph contained herein as of the Closing Date and as of all
times between the date hereof and the Closing Date;
(iv) the Certificate of the Secretary or an Assistant
Secretary of Prograph, dated the Closing Date, that the necessary corporate
action by the Board of Directors of Prograph has been taken to authorize the
consummation by Prograph of the transactions provided for herein; and
(v) the Employment Agreements, duly executed by Prograph.
Article VI
INDEMNIFICATION
6.1 Indemnification by Shareholders. Subject to Section 6.2 below, from
and after the Closing Date, the Shareholders shall indemnify and hold harmless
PSI, Prograph and any of their affiliates, and their respective officers,
directors, shareholders, representatives and agents (a "Prograph Indemnified
Party") against, and reimburse such Prograph Indemnified Party for, any
liability, damage, loss, obligation, demand, judgment, fine, penalty, cost or
expense, including reasonable attorneys' fees and expenses, and the costs of
investigation incurred in defending against or settling such liability, damage,
loss, cost or expense or claim therefor and any amounts paid in settlement
thereof (collectively "Damages") imposed on or reasonably incurred by such
Prograph Indemnified Part as a result of any breach of any representation,
warranty or covenant, on the part of the Shareholders set forth in Article II of
this Agreement; provided, however, that no Shareholder shall be required to make
any indemnification payments until and unless the amount of cumulative Damages
incurred by Prograph Indemnified Parties exceeds $50,000.
6.2 Prograph Holdback. As the sole and exclusive remedy for satisfying
Shareholders' indemnification obligations set forth in this Agreement, Prograph
shall be entitled to hold back from the Closing proceeds $1,000,000 of the
Aggregate Cash Consideration and 10% of the Aggregate Prograph Shares (the
"Escrowed Proceeds"), to be held in escrow for a period of one year following
the Closing Date (the "Expiration Date"). Solely for purposes of this Section
6.2, the parties agree that each share of Prograph Common Stock shall be deemed
to be worth the then current fair market value per share at any time that such
shares are required to be valued for purposes of satisfying indemnity
obligations. On the first anniversary of the Closing Date, if no Damages shall
have been incurred during such one-year period, Prograph shall immediately turn
over to each of the Shareholders the portion of the Escrowed Proceeds allocable
to them.
6.3 Escrow Arrangements. (a) Escrow Fund. At the Closing, the
Shareholders will be deemed to have received and deposited with the Escrow Agent
(as defined below) the Escrowed Proceeds without any act of any Shareholder. As
soon as practicable after the Closing, the
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Escrow Proceeds, will be deposited with an institution acceptable to Prograph
and the Securityholder Agent, such deposit to constitute an escrow fund (the
"Escrow Fund") to be governed by the terms set forth herein and at the
Shareholders' and Prograph's cost and expense. The Escrow Fund shall be
available to compensate Prograph for any Damages. Prograph and the Shareholders
acknowledge that such Damages, if any, would relate to unresolved contingencies
existing at the Closing, which if resolved at the Closing would have led to a
reduction in the Purchase Price.
(b) Escrow Period; Distribution upon Termination of Escrow Periods.
Subject to the following requirements, the Escrow Fund shall be in existence
immediately following the Closing and shall terminate at 5:00 p.m., Pennsylvania
time, on the Expiration Date (the "Escrow Period"); provided that the Escrow
Period shall not terminate with respect to such amount, that together with the
aggregate amount remaining in the Escrow Fund is necessary in the reasonable
judgment of Prograph, subject to the objection of the Securityholder Agent and
the subsequent arbitration of the matter in the manner provided in Section
6.3(f) hereof, to satisfy any unsatisfied claims concerning facts and
circumstances existing prior to the termination of such Escrow Period. As soon
as all such claims have been resolved, the Escrow Agent shall deliver to the
Shareholders the remaining portion of the Escrow Fund not required to satisfy
such claims. Deliveries of Escrowed Proceeds to the Shareholders pursuant to
this Section 6.3(b) shall be made in proportion to their respective original
contributions to the Escrow Fund
(c) Voting Rights, Investment of the Escrow Fund. Each Shareholder
shall have voting rights with respect to the shares of Prograph Common Stock
contributed to the Escrow Fund by such Shareholder. The Escrow Agent shall
invest the cash portion of the Escrow Fund and interest thereon in U.S.
Government obligations or obligations of commercial banks having at least $10
billion in assets with a maturity of one year or less but in no event extending
beyond the Expiration Date.
(d) Claims Upon Escrow Fund.
(i) Upon receipt by the Escrow Agent wit a copy to the
Shareholder Agent at any time on or before the last day of the Escrow Period of
a certificate signed by any officer of Prograph (an "Officer's Certificate"):
(a) stating that Prograph has paid or properly accrued or reasonably anticipates
that it will have to pay or accrue Damages, and (b) specifying in reasonable
detail the individual items of Damages included in the amount so stated, the
date each such item was paid or properly accrued, or the basis for such
anticipated liability, and the nature of the misrepresentation, breach of
warranty or covenant to which such item is related, the Escrow Agent shall,
subject to the provisions of Section 6.3(e) hereof, transfer out of the Escrow
Fund to Prograph, as promptly as practicable, Escrowed Proceeds held in the
Escrow Fund in an amount equal to such Damages.
(ii) For the purposes of determining the number of shares of
Prograph Common Stock to be transferred to Prograph out of the Escrow Fund
pursuant to Section 6.3(d)(i) hereof, the shares of Parent Common Stock shall be
valued at the then current fair market value.
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(e) Objections to Claims. For a period of thirty (30) days after
delivery of an Officers Certificate to the Shareholder Agent, the Escrow Agent
shall make no transfers of any Escrowed Proceeds pursuant to Section 6.3(d)
hereof unless Escrow Agent shall have received written authorization from the
Shareholder Agent to make such delivery. After the expiration of such thirty
(30)-day period, Escrow Agent shall transfer Escrowed Proceeds from the Escrow
Fund in accordance with Section 6.3(d) hereof, provided that no such payment or
delivery may be made if the Securityholder Agent shall object in a written
statement to the claim made in the Officer's Certificate, and such statement
shall have been delivered to the Escrow Agent with a copy to Prograph prior to
the expiration of such thirty (30)-day period.
(f) Resolution of Conflicts; Arbitration.
(i) In case the Securityholder Agent shall so object in
writing to any claim or claims made in any Officer's Certificate, the
Securityholder Agent and Prograph shall attempt in good faith to agree upon the
rights of the respective parties with respect to each of such claims. If the
Securityholder Agent and Prograph should so agree, a memorandum setting forth
such agreement shall be prepared and signed by both parties and The Escrow Agent
shall be entitled to rely on any such memorandum and distribute Escrowed
Proceeds from the Escrow Fund in accordance with the terms thereof.
(ii) If no such agreement can be reached after good faith
negotiation, either Prograph or the Securityholder Agent may demand arbitration
of the matter unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration; and in
either such event the matter shall be settled by arbitration conducted by three
arbitrators. Prograph and the Securityholder Agent shall each select one
arbitrator, and the two arbitrators so selected shall select a third arbitrator.
The arbitrators shall set a limited time period and establish procedures
designed to reduce the cost and time for discovery while allowing the parties an
opportunity, adequate in the sole judgment of the arbitrators, to discover
relevant information from the opposing parties about the subject matter of the
dispute. The arbitrators shall rule upon motions to compel or limit discovery
and shall have the authority to impose sanctions, including attorneys' fees and
costs, to the extent as a court of competent law or equity, should the
arbitrators determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of a majority of the three arbitrators as to the
validity and amount of any claim in such Officer's Certificate shall be binding
and conclusive upon the parties to this Agreement, and notwithstanding anything
in Section 6.3(e) hereof, The Escrow Agent shall be entitled to act in
accordance with such decision and make or withhold payments out of the Escrow
Fund in accordance therewith. Such decision shall be written and shall be
supported by written findings of fact and conclusions which shall set forth the
award, judgment, decree or order awarded by the arbitrators.
(iii) Judgment upon any award rendered by the arbitrators may
be entered in any court having jurisdiction. Any such arbitration shall be held
in Allegheny County, Pennsylvania under the rules then in effect of the American
Arbitration Association.
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6.4 Securityholder Agent of the Shareholders; Power of Attorney.
(a) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be appointed as agent and
attorney-in-fact (the "Securityholder Agent") for each Shareholder for and on
behalf of the Shareholders, to give and receive notices and communications, to
authorize delivery to Prograph of Escrowed Proceeds in satisfaction of claims by
Prograph, to object to such deliveries, to agree to, negotiate, enter into
settlements and compromises of, and demand arbitration and comply with orders of
courts and awards of arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the judgment of Securityholder Agent for the
accomplishment of the foregoing. Such agency may be changed by the Shareholders
from time to time upon prior written notice to Prograph; provided that the
Securityholder Agent may not be removed unless holders of two-thirds of the
Shareholders' interest of the Escrow Fund agree to such removal and to the
identity of the substituted agent. Any vacancy in the position of Securityholder
Agent may be filled by approval of the holders of a majority in interest of the
Escrow Fund. No bond shall be required of the Securityholder Agent, and the
Securityholder Agent shall not receive compensation for his or her services.
Notices or communications to or from the Securityholder Agent shall constitute
notice to or from each of the Shareholders.
(b) Neither the Securityholder Agent nor the Escrow Agent shall be
liable for any act done or omitted hereunder in such capacity while acting in
good faith and in the exercise of reasonable judgment. The Shareholders on whose
behalf the Escrowed Proceeds were contributed to the Escrow Fund shall severally
indemnify the Securityholder Agent and hold the Securityholder Agent harmless,
and each Shareholder and Prograph shall severally indemnify the Escrow Agent and
hold it harmless, against any loss, liability or expense incurred without
negligence or bad faith on the part of the Securityholder Agent and arising out
of or in connection with the acceptance or administration of the Securityholder
Agent's duties hereunder, including the reasonable fees and expenses of any
legal counsel retained by the Securityholder Agent.
(c) Actions of the Securityholder Agent. A decision, act, consent
or instruction of the Securityholder Agent shall constitute a decision of all
the Shareholders for whom a portion of the Escrowed Proceeds otherwise issuable
to them are deposited in the Escrow Fund and shall be final, binding and
conclusive upon each of such Shareholder, and the Escrow Agent and Prograph may
rely upon any such decision, act, consent or instruction of the Securityholder
Agent as being the decision, act, consent or instruction of each every such
Shareholder. Prograph and the Escrow Agent are hereby relieved from any
liability to any person for any acts done by them in accordance with such
decision, act, consent or instruction of the Securityholder Agent.
6.5 Third-Party Claims. In the event Prograph becomes aware of a
third-party claim which Prograph believes may result in a demand against the
Escrow Fund, Prograph shall notify the Securityholder Agent, with a copy to the
Escrow Agent, of such claim, and the Securityholder Agent, as representative for
the Shareholders, shall be entitled, at their expense, to participate in any
defense of such claim. Prograph shall have the right in its sole discretion to
settle any such claim; provided, however, that except with the consent of the
Securityholder Agent, no settlement of any such claim with third-party claimants
shall alone be determinative of the amount of any claim against the Escrow Fund.
In the event that the Securityholder Agent has consented to any such settlement,
the Securityholder Agent shall have no power or authority to
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object under any provision of this Article VI to the amount of any claim by
Prograph against the Escrow Fund with respect to such settlement.
Article VII
SECURITIES LAW COMPLIANCE
7.1 Knowledge Respecting Prograph. By their approval of this Agreement,
each Shareholder represents and acknowledges that (i) such Shareholder is a
sophisticated investor with knowledge and experience in business and financial
matters, knows, or has had the opportunity to acquire, all information
concerning the business, affairs, financial condition and prospects of Prograph
which such Shareholder deems relevant to make a fully informed decision
regarding the consummation of the transactions contemplated hereby and is able
to bear the economic risk and lack of liquidity inherent in holding the Prograph
Stock. Without limiting the foregoing, each Shareholder understands and
acknowledges that neither Prograph nor anyone acting on its behalf has made any
representations or warranties other than those contained herein respecting
Prograph or the future conduct of Prograph's business or of PSI's business, and
no Shareholder has relied upon any representations or warranties other than
those contained herein in the belief that they were made on behalf of Prograph.
7.2 Status of Shares to be Issued. By their approval of this Agreement,
each Shareholder agrees, acknowledges and confirms that he has been advised and
understands as follows:
(a) Shareholder is acquiring the shares of Prograph Stock to be
issued to him for his own account and without a view to any distribution or
resale thereof, other than a distribution or resale which, in the opinion of
counsel for such Shareholder (which opinion shall be satisfactory in form and
substance to Prograph), may be made without violating the registration
provisions of the Securities Act of 1933, as amended (the "1933 Act") or any
applicable blue sky laws. Shareholder acknowledges that the shares of Prograph
Stock are "restricted securities" within the meaning of Rule 144 under the 1933
Act and have not been registered under the 1933 Act or any state securities laws
and thereafter must be held indefinitely unless they are subsequently registered
under the 1933 Act and any other state acts where registration may be required
before sale or an exemption from such registration is available. Prograph is
under no obligation to register the shares of Prograph Stock under the 1933 Act
or any state securities law or to take any action which would make available an
exemption from such registration.
(b) There shall be endorsed on the certificates evidencing the
shares of Prograph Stock delivered at Closing a legend substantially similar to
the following:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND
ARE "RESTRICTED SECURITIES" AS DEFINED BY RULE 144 UNDER THE 1933
ACT. THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
REGISTERING THE SHARES UNDER THE
▇-▇▇
▇▇
▇▇▇▇ ▇▇▇ AND THE SECURITIES LAWS OF ANY STATE REQUIRING SUCH
REGISTRATION, OR IN LIEU THEREOF, AN OPINION OF COUNSEL, WHICH
OPINION IS SATISFACTORY TO THE ISSUER OF THE SHARES, TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACTS. WITHOUT
LIMITING THE FOREGOING, THE SHARES MAY NOT BE SOLD WITHIN TWELVE
MONTHS AFTER THE DATE OF THIS CERTIFICATE WITHOUT AN OPINION OF
COUNSEL, WHICH OPINION IS SATISFACTORY TO THE ISSUER, THAT SUCH
SALE DOES NOT VIOLATE THE PENNSYLVANIA SECURITIES ACT OF 1972 OR
THE RULES AND REGULATIONS THEREUNDER."
(c) Except under certain limited circumstances, the above
restrictions on the transfer of the shares of Prograph Stock will also apply to
any and all shares of capital stock or other securities issued or otherwise
acquired with respect to such shares, including, without limitation, shares and
securities issued or acquired as a result of any stock dividend, stock split or
exchange or any distribution of shares or securities pursuant to any corporate
reorganization, reclassification or similar event.
(d) Prograph and its transfer agent may refuse to effect a transfer
of any of the shares of Prograph Stock by the Shareholders or any of their
successors, personal representatives or assigns otherwise than as contemplated
hereby.
7.3 Prograph Acquisition of the Stock. Prograph represents and warrants
that it is acquiring the Stock for its own account and without a view to any
distribution or resale thereof in violation of the registration provisions of
the 1933 Act, or any applicable blue sky laws. Prograph acknowledges that the
shares of Stock are "restricted securities" within the meaning of Rule 144 under
the 1933 Act and have not been registered under the 1933 Act or any state
securities laws and thereafter must be held indefinitely unless they are
subsequently registered under the 1933 Act and any other state acts where
registration may be required before sale or an exemption from such registration
is available.
Article VIII
MISCELLANEOUS
8.1 Further Assurances. The parties agree to execute and deliver all
such other instruments and take all such other action as any party may
reasonably request from time to time, before or after Closing and without
payment of further consideration, in order to effectuate the transactions
provided for herein. The parties shall cooperate fully with each other and with
their respective counsel and accountants in connection with any steps required
to be taken as part of their respective obligations under this Agreement,
including, without limitation, the preparation of financial statements and tax
returns.
8.2 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing Date:
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(i) by the written agreement of Prograph and the Shareholders;
(ii) by Prograph by written notice to the Securityholder Agent
if any of the conditions set forth in Section 5.1 shall not have been, or if it
becomes apparent that any of such conditions will not be, fulfilled by 5:00 p.m.
EST on January 31, 2000, unless such failure shall be due to the failure of
Prograph to perform or comply with any of the covenants, agreements, or
conditions hereof to be performed or complied with by it prior to the Closing;
or
(iii) by the Shareholders by written notice from the
Securityholder Agent to Prograph if any of the conditions set forth in Section
5.2 shall not have been, or if it becomes apparent that any of such conditions
will not be, fulfilled by 5:00 p.m. EST on January 31, 2000, unless such failure
shall be due to the failure of PSI or the Shareholders to perform or comply with
any of the covenants, agreements or conditions to be performed or complied with
by them prior to the Closing.
(b) In the event of the termination of this Agreement pursuant to
this Section, this Agreement shall become void, without any liability to any
party in respect hereof or of the transactions contemplated hereby on the part
of any party hereto, or any of its directors, officers, employees, agents,
consultants, representatives, advisers, stockholders or Affiliates, except for
any liability resulting from such party's breach of this Agreement.
8.3 Expenses. Each party will pay its own legal fees and expenses
incurred in connection with the Proposed Transactions.
8.4 Indulgences, Waivers, Etc. Neither the failure nor any delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence.
8.5 Section 338(h)(10) Election; Subchapter S Tax Liability.
(a) PSI and each of the Shareholders will, at the request of Prograph,
join in making an election under Section 338(h)(10) of the Code. Each of the
Shareholders will include any income, gain, loss, deduction, or other tax item
resulting from such Section 338(h)(10) election on their Returns to the extent
permitted by applicable law. If Prograph makes such election, Prograph shall
complete the Form 8023, and shall allocate the purchase price in accordance with
the allocation principles set forth on Exhibit 8.5. Each Shareholder shall sign
the completed Form 8023 and such other Tax forms as are necessary to effectuate
the Section 338(h)(10) Election.
(b) Each Shareholder shall cause his accountants to provide to Prograph
a computation showing in reasonable detail the amount (the "Incremental Tax
Liability") by which his aggregate federal and state tax liability (other than
any taxes attributable to "built-in gains" under Section 1374 of the Code or
comparable provisions of state laws), taking into account the Section 338(h)(10)
Election, shown on his federal and state income tax Returns (his "Actual Tax
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇") exceeds the aggregate amount of such tax liability to which he would
have been subject had such election not been made (his "Base Liability"). Each
Shareholder and Prograph will use their best efforts to agree as to the amount
of the Shareholder's Incremental Tax Liability. If agreement cannot be reached
within 15 days after such computation is provided to Prograph, the determination
of Incremental Tax Liability will be referred to an accounting firm acceptable
to the Shareholder and Prograph, each of which shall provide such firm with a
schedule showing in reasonable detail its determination of the amount of
Incremental Tax Liability. The determination of such accounting firm shall be
final and conclusive on both parties. The party whose determination of
Incremental Tax Liability provided to the accounting firm differs from the value
determined by such firm by the larger amount shall bear the expenses of the
determination by the accounting firm. Prograph shall pay to the Shareholder the
amount of Incremental Tax Liability as determined pursuant to this Section
8.5(b) within 15 days after the amount of Incremental Tax Liability is
determined.
(c) In the event of any reduction or increase in a Shareholder's
Incremental Tax Liability as a result of audit, the Shareholder shall cause his
accountants to provide a revised computation of his Incremental Tax Liability to
Prograph, based on the adjusted income tax Returns. Procedures similar to those
in Section 8.5(b) shall apply to determine the revised amount of Incremental Tax
Liability. Within 15 days after the revised Incremental Tax Liability is
determined, Prograph shall pay the Shareholder or the Shareholder shall pay to
Prograph the difference between the Incremental Tax Liability as previously
computed and the revised Incremental Tax Liability. In the event of an audit,
Prograph shall be entitled to participate therein, and each Shareholder shall
not agree to any consensual resolution thereof which results in an increase in
the aggregate Incremental Tax Liability without Prograph's prior written
consent.
(d) Each Shareholder shall cause his accountants to provide to Prograph
a computation showing in reasonable detail the amount (the "Incremental 1999
Subchapter S Tax Liability") by which his aggregate 1999 federal and state tax
liability attributable to him as a result of his ownership of PSI stock, shown
on his federal and state income tax Returns (his "1999 Subchapter S Tax
Liability") exceeds or is less than his ratable portion of $450,000 (the
"Assumed Aggregate 1999 Subchapter S Tax Liability"). Shareholder and Prograph
will use their best efforts to agree as to the amount of the Shareholder's 1999
Subchapter S Tax Liability. If agreement cannot be reached within 15 days after
such computation is provided to Prograph, the determination of 1999 Subchapter S
Tax Liability will be referred to an accounting firm acceptable to the
Shareholder and Prograph, each of which shall provide such firm with a schedule
showing in reasonable detail its determination of the amount of 1999 Subchapter
S Tax Liability. The determination of such accounting firm shall be final and
conclusive on both parties. The party whose determination of 1999 Subchapter S
Tax Liability provided to the accounting firm differs from the value determined
by such firm by the larger amount shall bear the expenses of the determination
by the accounting firm. In the event the Shareholder's Incremental 1999
Subchapter S Tax Liability is negative, the Shareholder shall pay to Prograph
the amount of his Incremental 1999 Subchapter S Tax Liability as determined
pursuant to this Section 8.5(d) within 15 days after the amount of Incremental
1999 Subchapter S Tax Liability is determined. In the event the Shareholder's
Incremental 1999 Subchapter S Tax Liability is positive, Prograph shall pay to
the Shareholder the amount of his Incremental 1999 Subchapter S
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Tax Liability as determined pursuant to this Section 8.5(d) within 15 days after
the amount of Incremental 1999 Subchapter S Tax Liability is determined.
(e) In the event of any reduction or increase in a Shareholder's
Incremental 1999 Subchapter S Tax Liability as a result of audit, the
Shareholder shall cause his accountants to provide a revised computation of his
Incremental 1999 Subchapter S Tax Liability to Prograph, based on the adjusted
income tax Returns. Procedures similar to those in Section 8.5(d) shall apply to
determine the revised amount of Incremental 1999 Subchapter S Tax Liability.
Within 15 days after the revised Incremental 1999 Subchapter S Tax Liability is
determined, Prograph shall pay the Shareholder or the Shareholder shall pay to
Prograph the difference between the Incremental 1999 Subchapter S Tax Liability
as previously computed and the revised Incremental 1999 Subchapter S Tax
Liability. In the event of an audit, Prograph shall be entitled to participate
therein, and each Shareholder shall not agree to any consensual resolution
thereof which results in a decrease in the aggregate Incremental 1999 Subchapter
S Tax Liability without Prograph's prior written consent.
8.6 Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance, remediation and enforcement (including,
without limitation, provisions concerning limitations of actions) shall be
governed by and construed in accordance with the domestic laws of the
Commonwealth of Pennsylvania, notwithstanding any choice-of-laws doctrines of
such jurisdiction or any other jurisdiction which ordinarily would cause the
substantive law of another jurisdiction to apply, without the aid of any canon,
custom or rule of law requiring construction against the draftsman.
8.7 Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such as Federal Express, or by other messenger)
or when deposited in the United States mails, registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:
(a) If to Prograph:
▇▇▇▇ ▇▇▇▇
c/o Prograph Systems, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copy to:
▇▇▇▇▇▇▇ D'▇▇▇▇▇▇
c/o Prograph Systems, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(b) If to the Securityholder Agent:
------------------------------
c/o Programmed Solutions, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Any party may alter the address to which communications or copies are to
be sent by giving notice of such change of address to the other parties in
conformity with the provisions of this Section for the giving of notice.
8.8 Exhibits and Schedules. All Exhibits and Schedules attached hereto
are hereby incorporated by reference into, and made a part of, this Agreement.
8.9 Binding Nature of Agreement; No Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns, except that no party
may assign or transfer its rights or delegate its obligations under or interest
in this Agreement, by operation of law or otherwise, without the prior written
consent of the other parties hereto.
8.10 No Third-Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors and assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other person.
8.11 Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that any other
provision may be invalid or unenforceable in whole or in part for any reason.
Any term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
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