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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 6, 1997
Bristol Technology Systems, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-21633 58-2235556
(State or other juridiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5000 Birch Street, Suite 205, Newport Beach, California 92660
(Address of prinicipal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 475-0800
18201 Von Karman Avenue, Suite 305, Irvine, California 92612
(Former name or former address, if changed since last report)
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ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS
On June 6, 1997, the Agreement and Plan of Merger, as amended, (the "EBM
Agreement") by and among Bristol Technology Systems, Inc. ("the Company"), Cash
Registers, Inc., a wholly-owned subsidiary of the Company ("CRI"), Electronic
Business Machines, Inc. ("EBM") and Floyd Shirrell, the sole stockholder of EBM
was consummated. Under the terms of the EBM Agreement, EBM was merged into CRI
in a forward triangular merger in a tax-free reorganization to be accounted for
as a purchase.
In consideration for the EBM Merger, Mr. Shirrell will receive up to
$421,052.50 in cash and 147,033 shares of non-registered, restricted Common
Stock of the Company which were valued at $578,947.50 based upon the average of
the May 23, 1997 and May 27, 1997 closing price of the Company's Common Stock.
Of the amount of cash and stock of the Company to be distributed to Mr.
Shirrell, a total of $63,000 in cash and 22,095 shares of Common Stock of the
Company will be retained in escrow, and the aggregate purchase price for the
acquisition is subject to adjustment in the event EBM's net worth is less than
$124,000 and pre-tax earnings are less than $180,000 based on an audit to be
completed of EBM's financial statements for the year ending December 31, 1996.
The purchase price to be paid to Mr. Shirrell as a result of the merger was
negotiated on an "arms-length" basis and neither Mr. Shirrell or any of the
principals of the Company had a pre-existing relationship with one another prior
to the consummation of the transaction. Cash utilized for the acquisition was
provided by CRI from proceeds from its line of credit.
In connection with the EBM Merger, Mr. Shirrell will be retained as an
independent contractor of CRI and the Company pursuant to a written agreement to
(i) procure acquisition candidates for the Company; and (ii) advise CRI with
respect to market, sales and service opportunities for POS systems.
EBM, which has been in business since 1973, sells, installs and services
POS systems within central Indiana and central Kentucky from its offices in
Indianapolis, Indiana and Louisville, Kentucky. The primary focus of EBM's
business is to serve the POS systems needs of the table service restaurant
market with products manufactured by Micros. EBM also specializes in the sale of
generic PC systems in those situations when networking is a requirement of the
customer. For the twelve months ended December 31, 1996, EBM had preliminary
unaudited net revenues and pre-tax earnings of $2,500,000 and $188,000,
respectively. Total assets at December 31, 1996 were approximately $1,000,000.
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ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of businesses acquired (TO BE PROVIDED BY
AMENDMENT)
(b) Pro Forma Financial Information (T0 BE PROVIDED BY AMENDMENT)
(c) Exhibits:
(1) Agreement and Plan of Merger by and among Bristol
Technology Systems, Inc., Cash Registers, Inc., Floyd
Shirrell and Electronic Business Machines, Inc.
(Exhibit 10.34)
(2) First Amendment to Agreement and Plan of Merger by and
among Bristol Technology Systems, Inc., Cash Registers,
Inc., Floyd Shirrell and Electronic Business Machines,
Inc. (Exhibit 10.35)
(3) Independent Contractor Agreement by and between Bristol
Technology Systems, Inc., Cash Registers, Inc. and
Floyd Shirrell (Exhibit 10.36)
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRISTOL TECHNOLOGY SYSTEMS, INC.
By: /S/ KELLY KAUFMAN
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Kelly Kaufman, Vice President of Finance
June 20, 1997
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INDEX TO EXHIBITS
Index
Number Description
10.34 Agreement and Plan of Merger by and among Bristol Technology Systems,
Inc., Cash Registers, Inc., Floyd Shirrell and Electronic Business
Machines, Inc.
10.35 First Amendment to Agreement and Plan of Merger by and among Bristol
Technology Systems, Inc., Cash Registers, Inc., Floyd Shirrell and
Electronic Business Machines, Inc.
10.36 Independent Contractor Agreement by and between Bristol Technology
Systems, Inc., Cash Registers, Inc. and Floyd Shirrell
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EXHIBIT 10.34
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
April 14th, 1997, by and among BRISTOL TECHNOLOGY SYSTEMS, INC., a Delaware
corporation ("Bristol"); CASH REGISTERS, INC., a Kentucky corporation
("Purchaser"); FLOYD SHIRRELL, a resident of the State of Indiana
("Shareholder"); and ELECTRONIC BUSINESS MACHINES, INC., an Indiana corporation
("Company").
RECITALS
A. Bristol owns all of the issued and outstanding capital stock of
Purchaser.
B. Shareholder owns all of the issued and outstanding capital stock of
Company.
C. This Agreement contemplates a forward subsidiary merger of Company
with and into Purchaser in a tax free reorganization pursuant to Code Section
368(a)(2)(D), whereby Shareholder shall exchange all of his shares of capital
stock of Company (the "Company Shares") for cash and shares of non-registered,
restricted Common Stock of Bristol (the "Restricted Stock"), which consideration
shall be subject to adjustment as provided below.
D. The parties hereto expect that the merger will further certain of
their business objectives, including, without limitation, increased market
share, reduced administrative costs and volume efficiencies.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties herein contained, the parties hereto do hereby
agree as follows:
ARTICLE 0
CERTAIN DEFINITIONS
Capitalized terms not ascribed a meaning in this Section 0 shall have
the meaning ascribed to such term elsewhere in this Agreement. The capitalized
terms set forth below shall have the following meanings:
"Approval" has the meaning set forth in Section 2.5(d).
"Audited Closing Balance Sheet"has the meaning set forth in Section 1.5.
"Audited Closing Income Statement" has the meaning set forth in Section
1.5.
"Certificates" has the meaning set forth in Section 1.1.
"Class I Inventory" and "Class II Inventory" have the meanings set forth
in Section 2.4(c).
"Closing" has the meaning set forth in Section 1.4.
"Closing Balance Sheet" has the meaning set forth in Section 1.5.
"Closing Date" has the meaning set forth in Section 1.1.
"Closing Income Statement" has the meaning set forth in Section 1.5.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Shares" has the meaning set forth in Recital C.
"Confidential Information" means any information concerning the business
and affairs of Company that is not already generally available to the public.
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"Kentucky Corporation Law" means the general corporation laws set forth
in Chapter 271B of the Kentucky Revised Statutes, as amended.
"Effective Time" has the meaning set forth in Section 1.1.
"Employee Benefit Plan" means any (i) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan;
(ii) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan; (iii) qualified defined benefit retirement plan
or arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan); or (iii) Employee Welfare Benefit Plan or fringe benefit
plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Encumbrance" means any mortgage, pledge, lien, encumbrance, security
interest, charge, option, or other adverse interest, other than (i) mechanic's,
materialmen's, and similar liens; (ii) liens for Taxes not yet due and payable
or for Taxes that Company is contesting in good faith through appropriate
proceedings; (iii) purchase money liens and liens securing rental payments under
capital lease arrangements; and (iv) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Account" has the meaning set forth in Section 1.4.
"Escrow Agent" has the meaning set forth in Section 1.4.
"Escrow Agreement" has the meaning set forth in Section 1.4.
"Facilities" has the meaning set forth in Section 2.9.
"Financial Statements" has the meaning set forth in Section 2.3(a).
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Hazardous Substances" has the meaning set for in Section 2.5(d).
"Knowledge" means that Company and Shareholder are actually or
reasonably should be aware of the fact or matter in question after a reasonable
investigation concerning the existence of such fact or matter.
"Leased Premises" has the meaning set forth in Section 2.4(a).
"Leases" has the meaning set forth in Section 2.4(a).
"Liability" means any debt, claim, loss, liability, damage, judgment,
fine, penalty, cost, expense or other obligation of any nature, whether known or
unknown, asserted or unasserted, absolute or contingent, liquidated or
unliquidated, or due or to become due, including any Liability for Taxes.
"Materially Adverse Effect" means a materially adverse effect on the
business, financial condition, sales, results of operation, prospects,
customers, suppliers, employee relations, insurability, assets or properties of
Company.
"Merger" has the meaning set forth in Section 1.1.
"Net Worth" means the difference between (i) the audited aggregate book
value of the assets of Company, and (ii) the audited aggregate book value of the
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liabilities of Company as reflected on the Audited Closing Balance Sheet,
provided, that in determining Net Worth for purposes of the Audited Closing
Balance Sheet, Ernst & Young, LLP may (i) make reasonable adjustment to or
establish reasonable reserves for uncollectible accounts receivable, (ii) adjust
the book value of Company's inventory, other assets or liabilities to account
for under-or over-valued inventory, other assets or liabilities, as the case may
be; and/or (iii) make any other adjustments that the auditors deem necessary or
appropriate in order to state the Audited Closing Balance Sheet in accordance
with GAAP.
"Net Worth Deficiency" has the meaning set forth in Section 1.5(a)(1).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Personal Property" has the meaning set forth in Section 2.4(b).
"Pre-Tax Earnings" means audited earnings before income taxes as
reflected on the Audited Closing Income Statement, provided, that in determining
Pre-Tax Earnings for purposes of the Audited Closing Income Statement, Ernst &
Young, LLP may make any adjustments that such accountants deem necessary or
appropriate in order to state the Audited Closing Income Statement in accordance
with GAAP.
"Pre-Tax Earnings Deficiency" has the meaning set forth in Section
1.5(a)(2).
"Restricted Shares" has the meaning set forth in Section 1.4.
"Restricted Stock" has the meaning set forth in Recital C.
"SBA" means the Small Business Administration.
"Surviving Corporation" has the meaning set forth in Section 1.1.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs, duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on, minimum,
estimated, or other tax, duty or assessment of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE 1
THE BASIC TRANSACTION
1.1 The Merger. On and subject to the terms and conditions of this
Agreement, Company will merge with and into Purchaser (the "Merger") on May 31,
1997 (the "Closing Date"), at such time (the "Effective Time") as the Purchaser
and Company file Certificates of Merger (the "Certificates") with the
Secretaries of State of the States of Kentucky and Indiana, substantially in the
form of Exhibits "A" and "B" hereto. Purchaser shall be the corporation
surviving the Merger (the "Surviving Corporation").
1.2 Actions Taken on or Prior to the Closing Date. On or prior to the
Closing Date, Bristol and Purchaser shall conduct a due diligence investigation
of Company and the parties hereto shall perform their respective delivery
obligations set forth in Article 6, below.
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1.3 Effect of Merger.
1.3.1 General. At the Effective Time, the merger shall have the
effect set forth in Section 271B.11-060 of the Kentucky Corporation Law. Without
limiting the foregoing, Surviving Corporation may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either Purchaser or Company in order to
carry out and effectuate the transactions contemplated by this Agreement.
1.3.2 Certificate of Incorporation. The Certificate of
Incorporation of Purchaser in effect at and as of the Effective Time shall
remain the Certificate of Incorporation of Surviving Corporation.
1.3.3 By-laws. The By-laws of Purchaser in effect at and as of
the Effective Time shall remain the By-laws of Surviving Corporation.
1.3.4 Directors and Officers. The directors and officers of
Purchaser holding such positions at and as of the Effective Time, shall continue
to be the directors and officers of Surviving Corporation.
1.3.5 Conversion of Company Shares. At and as of the Effective
Time, the Company Shares owned by Shareholder shall be converted into the right
of Shareholder to exchange his Company Shares at the Closing for cash and
Restricted Stock in accordance with Sections 1.4 and 1.5, below. Upon such
conversion, no Company Share shall be deemed to be outstanding or to have any
rights attributed to it other than those set forth in this Section 1.3.5.
Shareholder shall deliver all of his Company Shares to Purchaser on or before
the Closing Date and such shares shall be canceled at the Closing.
1.3.6 Capital Stock of Purchaser and Bristol. Each share of
capital stock of Purchaser and Bristol, including, but not limited to, each
share of Restricted Stock, issued and outstanding at and as of the Effective
Time shall remain issued and outstanding.
1.4 Closing. If the conditions to close, as set forth in Article 5,
below, are satisfied, then the parties hereto shall meet on the Closing Date at
the offices of Purchaser, located at 503 North Main Street, London, Kentucky
40741, commencing at 9:00 a.m. local time (the "Closing"), or at such other
place or in such other manner as the parties shall mutually agree. At the
Closing, Purchaser shall file the Certificates and, thereafter (and on the
Closing Date) (i) Purchaser shall deliver to Shareholder Three Hundred
Thirty-Seven Thousand Dollars ($337,000) in immediately available funds; and
(ii) Bristol shall deliver to Shareholder Four Hundred Sixty-Three Thousand
Dollars ($463,000) worth of Restricted Stock. In addition, (i) Purchaser shall
deposit with Smith, Silbar, Duffy, Parker & Woffinden, LLP (the "Escrow Agent")
Sixty-Three Thousand Dollars ($63,000) in immediately available funds; and (ii)
Bristol shall deposit with Escrow Agent Eighty-Seven Thousand Dollars ($87,000)
worth of Restricted Stock. (1) Escrow Agent shall (i) hold the cash and the
Restricted Shares in an escrow account (the "Escrow Account") in accordance with
an Escrow Agreement substantially in the form of Exhibit "C" hereto (the "Escrow
Agreement"); and (ii) distribute the cash and the Restricted Shares in
accordance with the Escrow Agreement and Section 1.5, below.
1.5 Adjustments. Commencing immediately after the Closing Date, (i)
Shareholder shall prepare a balance sheet (the "Closing Balance Sheet") and an
income statement (the "Closing Income Statement") for Company as of the Closing
Date; and (ii) Ernst & Young, LLP shall audit in accordance with GAAP the
Closing Balance Sheet (the "Audited Closing Balance Sheet") and the Closing
___________________________________
(1) The exact number of shares of Restricted Stock which Bristol is to deliver
to Shareholder and Escrow Agent on the Closing Date (which shall be rounded down
to the nearest whole number of shares) shall be determined by and based upon the
May 25, 1997 closing price of Bristol's publicly traded Common Stock as reported
in the Wall Street Journal (the Restricted Stock delivered by Bristol to
Purchaser and Escrow Agent shall hereinafter be referred to as the "Restricted
Shares").
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Income Statement (the "Audited Closing Income Statement"). Upon completion of
the Audited Closing Balance Sheet and the Audited Closing Income Statement,
Shareholder shall deliver written instructions to Escrow Agent to:
(a) Subject to adjustment pursuant to subparagraphs (1)and(2),
below, deliver to Shareholder Sixty-Three Thousand Dollars ($63,000) in cash and
Eighty-Seven Thousand Dollars ($87,000) worth of Restricted Shares.
(1) If the Net Worth of Company as stated on the Audited
Closing Balance Sheet is less than One Hundred Twenty-Four Thousand Dollars
($124,000) (the "Net Worth Deficiency"), then the cash and Restricted Shares
otherwise due Shareholder under Section 1.5(a), above, shall be reduced (in the
ratio of 42.105% cash and 57.895% Restricted Shares) by the product of (i) the
amount of the Net Worth Deficiency, times (ii) 7.66.
(2) If the Pre-Tax Earnings of Company as stated on the
Audited Closing Income Statement are less than One Hundred Eighty Thousand
Dollars ($180,000) (the "Pre-Tax Earnings Deficiency"), then the cash and
Restricted Shares otherwise due Shareholder under Section 1.5(a), above, shall
be further reduced (in the ratio of 42.105% cash and 57.895% Restricted Shares)
by the product of (i) the amount of the Pre-Tax Earnings Deficiency, times (ii)
5.27.
(b) The amount of the cash reductions made pursuant to
subparagraphs (a) and (b), above, if any, shall be paid by Escrow Agent to
Surviving Corporation. The number of Restricted Shares reduced pursuant to
subparagraphs (a) and (b), above, if any, shall be delivered by Escrow Agent to
Bristol.
1.6 Additional Adjustments. If the aggregate adjustments made pursuant
to Sections 1.5(a)(1) and (2), above, exceed One Hundred Fifty Thousand Dollars
($150,000), then Bristol and Surviving Corporation shall have the right to
offset such excess amounts, on a dollar for dollar basis, against future
payments due Shareholder from Surviving Corporation under the fee and commission
provisions set forth in the Independent Contractor Agreement described in
Section 6.2, below.
1.7 Potential Additional Consideration. If the Net Worth of the Company
as stated on the Audited Closing Balance Sheet is greater than One Hundred
Twenty-Four Thousand Dollars ($124,000), then such excess amount shall be paid
to Shareholder within fifteen (15) days of the completion of the audited Closing
Balance Sheet, on a dollar for dollar basis, in the ratio of 42.105% cash paid
by Purchaser and 57.895% Restricted Shares delivered by Bristol.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF COMPANY AND SHAREHOLDER
Company and Shareholder jointly and severally represent and warrant to,
and agree with, Bristol, Purchaser and Surviving Corporation that (except for
changes contemplated by this Agreement), each of the following statements is
true, correct and complete as of the date of this Agreement and will be true,
correct and complete as of the Closing Date (each such statement to be made
again by Company and Shareholder on that date with the Closing Date being
substituted for the date of this Agreement throughout this Article 2):
2.1 Organization and Authority.
(a) Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Indiana, has all requisite
corporate power and authority to carry on its business as currently conducted
and to own or lease and operate its properties, and is duly qualified to do
business as a foreign corporation in each jurisdiction where its business makes
such qualification necessary. Company and Shareholder have the requisite power
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to enter into this Agreement and to carry out their respective obligations
hereunder.
(b) The copies of the Certificate of Incorporation and the
By-laws of Company which have been heretofore made available to Purchaser and
Bristol, are true copies of such instruments as amended to date, and such
instruments are in full force and effect. The stock certificates, transfer books
and minute books of Company heretofore made available to Purchaser and Bristol
are true and complete and constitute all of the stock certificates, transfer
books and minute books of Company.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by Company's Board of Directors and shareholder, and no other proceedings on the
part of Company are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement is a valid and binding obligation of Company
and Shareholder enforceable in accordance with its terms except as enforcement
may be limited to bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.
(d) Except as disclosed in Schedule 2.1(d) attached hereto, there
are no persons or entities of any kind in which Company owns, directly or
indirectly, any shares of capital stock, or any partnership, membership, joint
venture or equitable or similar interest.
(e) Except as set forth on Schedule 2.1(e)(1) attached hereto, no
consent, approval or authorization of, or declaration, filing or registration
with, any third party, including any government or regulatory authority, is
required in connection with the execution and delivery by Company or Shareholder
of this Agreement and the consummation by Company and Shareholder of the
transactions contemplated hereby. Except as set forth on Schedule 2.1(e)(2)
attached hereto, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) conflict with,
result in a breach of, or constitute a default under any of the terms,
conditions, or provisions of the Certificate of Incorporation or By-laws of
Company; (ii) violate any law, order, judgment or decree to which any of
Company's properties or assets are bound; (iii) violate or constitute a default
under (whether after the giving of notice, passage of time or both), or permit
the termination of, or impair any rights or increase any obligations of Company
under, any agreement or instrument to which Company is a party or by which any
part of Company's properties or assets is bound; or (iv) result in the
acceleration of the maturity of any debt or obligation of Company or in the
creation or imposition of any Encumbrance upon any of the property or assets of
Company.
2.2 Capitalization. The authorized capital stock of Company consists of
1,000 shares of common stock, no par value per, of which 65 shares are issued
and outstanding. All outstanding capital stock of Company was duly authorized
and validly issued, and is fully paid and nonassessable. Company does not have
outstanding, and is not bound by, any option, warrant or other right, call or
commitment to issue, or any obligation or commitment to purchase, any of its
capital stock or any securities convertible into or exchangeable for any of its
authorized capital stock. Shareholder (i) owns all of the outstanding capital
stock of Company; (ii) is the sole legal and beneficial owner of that number of
Company Shares set forth on Schedule 2.2(1) hereto; (iii) is in possession of
the certificate(s) representing such shares; (iv) owns such shares free and
clear of all Encumbrances with respect thereto; and (iv) has the full power,
authority and right to exchange, surrender and cancel such shares in accordance
with this Agreement and to perform his obligations hereunder with respect to the
exchange, surrender and cancellation of such shares. Except as set forth on
Schedule 2.2(2) attached hereto, there are no buy-sell agreements, shareholders'
agreements or similar agreements relating to any of the shares of the capital
stock of Company.
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2.3 Financial Matters.
(a) Attached hereto as Schedule 2.3(a)(1) are the unaudited
balance sheets of Company at December 31, 1994, at December 31, 1995, at
December 31, 1996, and at January 31, 1997, the related statements of income for
the annual and one (1) month period then ended, respectively, (all of such
financial statements being hereinafter referred to as the "Financial
Statements"). Except as set forth in Schedule 2.3(a)(2) attached hereto, the
Financial Statements (i) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby; (ii) present fairly and
accurately the financial condition of Company as of such dates and the results
of operations of Company for such periods; and (iii) are correct and complete,
and are consistent with the books and records of Company (which books and
records are correct and complete).
(b) The Net Worth of Company as reflected on the Audited Closing
Balance Sheet shall not be less than One Hundred Twenty-Four Thousand Dollars
($124,000).
(c) The Pre-Tax Earnings of Company as reflected on the Audited
Closing Income Statement shall not be less than One Hundred Eighty Thousand
Dollars ($180,000).
(d) Company does not have any Liabilities, other than those which
(i) are set forth in the Financial Statements; (ii) have been specifically and
expressly disclosed in the Schedules hereto by reference to the specific Section
of this Agreement to which such disclosure relates; (iii) have been incurred
since the date of the most recent Financial Statements in the Ordinary Course of
Business in amounts and on terms consistent, individually and in the aggregate,
with Company's past practice; or (vi) are expressly contemplated by this
Agreement.
(e) Since the date of the January 31, 1997 Financial Statements,
(i) Company has operated its business only in the Ordinary Course of Business;
(ii) there has not occurred any event, condition or circumstance that has had or
is likely to have a Materially Adverse Effect on Company; (iii) Company has not
issued or sold, or contracted to sell, any of its capital stock, notes, bonds or
other securities, or any option to purchase the same, or entered into any
agreement with respect thereto; (iv) Company has not incurred any property
damage, destruction or similar loss in an aggregate amount exceeding Ten
Thousand Dollars ($10,000) whether or not covered by insurance; (v) Company has
not suffered any loss or any prospective loss, of any significant supplier,
distributor, licensor, contractor or customer or altered any contractual
arrangement with any such supplier, distributor, licensor, contractor or
customer; (vi) Company has not incurred any Liability, made any expenditure, or
sold any assets or properties, except in each case in the Ordinary Course of
Business, consistent with past practices and at arms-length; (vii) there has
been no declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of Company, and Company has not
redeemed, repurchased or otherwise acquired any of its capital stock or
securities convertible into or exchangeable for its capital stock or entered
into any agreement to do so (provided, however, that Company (a) may make a cash
distribution to Shareholder prior to the Closing Date (subject to the purchase
price adjustments of Section 1.5 and 1.6, above); and (b) shall transfer to
Shareholder the Facilities and all loans secured by the Facilities in accordance
with Sections 4.2, above, and 4.10, below); (viii) Company has not made any
prepayments on any of its Liabilities, securities or other obligations, other
than trade payables in the Ordinary Course of Business; (ix) there has not been
any increase in the rate of compensation payable or to become payable to any of
Company's officers or employees or any increase in the amounts paid or payable
to such officers or employees under any bonus, insurance, pension or other
benefit plan, or any arrangements theretofore made for or with any of such
officers or employees; (x) Company has not adopted or amended any benefit plan,
agreement, trust, fund or other arrangement for the benefit of employees except
as required by Tax laws; and (xi) except as required by applicable law, there
has been no change in any accounting principle, procedure or practice followed
by Company or in the method of applying such principle, procedure or practice.
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(f) Attached as Schedule 2.3(f) is a list containing all
distributions, credits or compensation, of any nature, paid or to be paid to
Shareholder by Company in fiscal year 1996 and 1997.
2.4 Assets.
(a) As of the Closing Date, Company shall own no real property.
Schedule 2.4(a) attached hereto contains a list of all real property leased by
Company (the "Leased Premises"), together with copies of each of the leases (the
"Leases"), including the name of the landlord or sublandlord, a description of
the Leased Premises, the commencement and expiration dates of the current term,
the security deposited by Company with the landlord or sublandlord, if any, and
the monthly rental (including all base rent and all additional rents). Each
Lease is in full force and effect and has not been assigned, modified,
supplemented or amended, and neither Company nor the landlord or sublandlord
under any Lease is in default under any of the Leases, and no circumstance or
state of facts exists which, with the giving of notice or passage of time, or
both, would permit the landlord or sublandlord under any Lease to terminate any
Lease.
(b) Schedule 2.4(b) attached hereto contains a list of all
personal property (other than inventory and other than items with a book value
of less than Ten Thousand Dollars ($10,000)) ("Personal Property") and real
property improvements (including fixtures but excluding items with a book value
of less than Ten Thousand Dollars ($10,000)) owned by Company. All Personal
Property and real property improvements of Company are in good condition and
repair and are adequate for the uses to which they are being put or would be put
in the Ordinary Course of Business, and such Personal Property and real property
improvements are not in need of maintenance or repair except for routine
maintenance and repair and as otherwise disclosed on Schedule 2.4(b).
(c) The inventory of Company is comprised of two types: (i)
inventory held for sale to customers ("Class I Inventory"), which inventory is
identified on Schedule 2.4(c)(i) attached hereto; and (ii) inventory of
products, parts and supplies held for customer support and service ("Class II
Inventory"), which inventory is identified on Schedule 2.4(c)(ii) attached
hereto. Each item of Class I Inventory is in good and marketable condition and
fit for the purpose for which it was produced or manufactured, and each item of
Class II inventory is fairly and reasonably valued on the balance sheet of the
most recent Financial Statements and is not obsolete, damaged or defective
(except for obsolescence, damages or defects which in the aggregate are not
likely to have a Materially Adverse Effect on Company).
(d) The accounts receivable of Company reflected on the balance
sheet of the January 31, 1997 Financial Statements as prepared by the Company's
accounting firm have arisen from sales or the rendering of services in the
Ordinary Course of Business and are not in dispute or subject to any setoffs,
discounts, credits, reductions or counterclaims whatsoever and, with usual and
ordinary collection efforts, will be paid in full, net of reserves reflected on
such balance sheet, within ninety (90) days after the Closing Date, without
resort to legal action.
(e) Company owns, licenses or otherwise has the full right to
use, all patents, trademarks, trade names, service marks, copyrights,
technology, know-how and processes, and confidential information used in the
conduct of its business. Schedule 2.4(e)(1) attached hereto contains a list of
all registered and unregistered patents, trademarks, trade names, service marks
and copyrights used by Company, all applications therefor and all licenses and
other agreements relating thereto, which are owned by Company or used in the
business of Company. No consent of any third party will be required for the use
thereof upon completion of the transactions contemplated by this Agreement. No
claims are currently being asserted by any person or entity with respect to the
use of any such patents, trademarks, service marks, trade names, copyrights,
technology, know-how or processes or confidential information or challenging or
questioning the validity or effectiveness of any such license or agreement, nor,
to the Knowledge of Company and Shareholder, is there any basis for any such
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claims. The perpetual use of such patents, trademarks, trade names, service
marks, copyrights, technology, know-how or processes, or confidential
information by Company does not infringe on the rights of any person or entity,
and, to the Knowledge of Company and Shareholder, there is no infringing use of
Company's patents, trademarks, trade names, service marks or copyrights by
others.
(f) Schedule 2.4(f) attached hereto contains a list of all
written and oral agreements (other than the Leases) that either are not
terminable at will or may involve more than Ten Thousand Dollars ($10,000)
during the term thereof and to which Company is a party or by which Company or
any of Company's assets or properties are bound. Each such agreement is legally
binding and in full force and effect, and there is no existing or alleged
default or event of default under any such agreement, nor does there exist any
event or condition which, with notice or lapse of time or both, would constitute
such a default or event of default by Company. Copies of all documents listed in
Schedule 2.4(f) have been delivered to Purchaser and Bristol, and are true and
complete in all respects and include all amendments and supplements thereto and
modifications thereof.
(g) Schedule 2.4(g) attached hereto contains a list of (i) every
bank, savings and loan or other financial institution in which Company has any
accounts or lock boxes and the corresponding account identification number, if
any; (ii) the names of the persons authorized to make withdrawals therefrom or
have access thereto; and (iii) each person who holds a power of attorney for
Company.
(h) Schedule 2.4(h) attached hereto contains a list of the ten
(10) largest customers of Company measured by the revenues from such customers
during the twelve (12) month period commencing March 1, 1996 and ending February
28, 1997, showing the approximate total billings by Company to each such
customer during such period. There has not been any materially adverse change in
the business relationship of Company with any customer named in Schedule 2.4(h).
Except for the customers named in Schedule 2.4(h), Company did not have any
customer who accounted for more than five percent (5%) of the aggregate sales or
services of Company during the twelve (12) month period commencing March 1, 1996
and ending February 28, 1997. No person or entity that was a customer of Company
at any time during the past twelve (12) months was at such time controlled by,
in control of or under common control with Company or Shareholder.
(i) Schedule 2.4(i) attached hereto contains a list of the ten
(10) largest suppliers of the Company measured by payments to such suppliers
during the twelve (12) month period commencing March 1, 1996 and ending February
28, 1997. There has not been any materially adverse change in the business
relationship of Company with any supplier named in Schedule 2.4(i). Except as
set forth on Schedule 2.4(i), no person or entity that was a supplier of Company
at any time during the past twelve (12) months was at such time controlled by,
in control of or under common control with Company or Shareholder.
(j) Schedule 2.4(j) attached hereto contains a list of insurance
policies in force currently or at any time during the past two (2) years and
relating to Company or its assets or properties, including in each instance the
name of the carrier, the term of the policy, the periods for which it has been
continuously in effect, the annual premium and the general scope of coverage.
Such insurance is and was sufficient in type to protect Company as it currently
conducts its business and as it has conducted its business during the past two
(2) years and the premiums for such insurance policies are fully paid. None of
the policies provides for the assessment of additional or retroactive premiums,
and there are no loans outstanding against any such policies. No notice of
cancellation or non-renewal with respect to, or disallowance of any claim under,
any insurance policy listed or required to be listed on Schedule 2.4(j) or
binder listed or required to be listed in Schedule 2.4(j) has been received by
Company. No claim or event, which forms the basis of a claim, has occurred which
could cause Company's insurers to substantially increase the cost of insurance
for Company.
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(k) Except as set forth on Schedule 2.4(k) attached hereto, all
assets and properties purported to be owned by Company are owned free and clear
of all Encumbrances. Company rightfully possesses or has the right to use all
assets and properties necessary to conduct its business.
2.5 Legal Matters.
(a) Except as set forth on Schedule 2.5(a) attached hereto, there
is no action, suit, proceeding or investigation pending, or, to the Knowledge of
Company or Shareholder, threatened, at law or in equity, before any arbitrator
or court or other governmental authority, nor any outstanding judgment, decree,
injunction, charge, award or order, against or in any manner involving Company
or any of Company's assets or properties, or the Company Shares.
(b) Company has complied with all judgments, orders, rulings,
statutes, laws, permits, licenses, franchises, ordinances and other governmental
authorizations, approvals and regulations applicable to it or any of its
operations, properties or assets. Company has all licenses and permits and other
governmental authorizations and approvals required for the operation of its
business and the use of its assets and properties.
(c) Company has filed or caused to be filed all federal, state,
local and foreign income and other Tax Returns required under applicable law to
be filed on or before the Closing Date, Company has paid or made provision for
all Taxes and other charges which have or may become due for the periods covered
by such Tax Returns, all such Tax Returns are true, correct and complete in all
respects. None of the Tax Returns of Company are currently under investigation
or audit, nor to the Knowledge of Company or Shareholder is an investigation or
audit pending, and there has not been an investigation or audit of the Tax
Returns of Company during the past seven (7) years. There are no outstanding
agreements or waivers extending the statutory period of limitations applicable
to any Tax Return for any period. The accounting treatment of all items of
income, gain, loss, deduction and credit as reported on all Tax Returns and
estimates filed by or on behalf of Company are true and complete, and all
deferred Taxes and all Taxes due for the period ending on the Closing Date have
been accrued on the Balance Sheet of the most recent Financial Statements
through the date thereof. Company has never been, nor is Company currently, a
party to any agreement relating to the sharing of any liability for, or payment
of, Taxes with any third party. Schedule 2.5(c) attached hereto (i) lists all
federal, state, local and foreign income Tax Returns filed with respect to
Company for taxable periods ended on or after December 31, 1992; (ii) indicates
those Tax Returns that have been audited, if any; (iii) and indicates those
copies of all income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by Company since December 31, 1992.
No claim has ever been made by an authority in a jurisdiction where Company does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets of Company that
arose in connection with any failure (or alleged failure) to pay any Tax. All
Taxes owed by Company or which Company is obligated to withhold from amounts
owing to any employee, independent contractor, stockholder, creditor or third
party have been paid. There are no unresolved claims concerning Company's Tax
Liability, and no basis for any such claim exists.
(d) No solid, hazardous or toxic wastes, substances or materials,
as those terms are used in the Clean Air Act, Resource Conservation and Recovery
Act of 1976, as amended, the Hazardous Materials Transportation Act or the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986
(SARA), or in any other federal, state or local law or ordinance governing
hazardous, toxic or solid wastes, materials or substances, and no asbestos,
polychlorinated biphenyls, urea formaldehyde foam, explosives, infectious or
biological wastes or radioactive materials (all of the above being collectively
referred to herein as "Hazardous Substances") have been or are unlawfully
stored, treated, disposed of, managed, generated, manufactured, produced,
released, emitted or discharged, in, on, under or about the Leased Premises by
Company so as to (i) require, under any applicable law or treaty, a governmental
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approval, consent, waiver, exemption, variance, franchise, order, permit,
authorization, right or license (an "Approval"), unless such Approval has been
obtained and remains in full force and effect; or (ii) render the Leased
Premises in noncompliance with or in violation of any applicable law,
regulation, or permit or subject to any obligation, Liability, order or
requirements for remediation. No governmental or private action, suit or
proceeding concerning or arising out of the use, storage, treatment, discharge,
disposal, handling, manufacturing, processing, treatment, transportation,
release or threat of release of any Hazardous Substance at, under or in
connection with Company's business or the Leased Premises, or to enforce or
impose liability under environmental pollution laws, common law or laws relating
to the protection of worker and work place health and safety has been
instituted, initiated or, to the Knowledge of Company and Shareholder,
threatened against or with respect to Company or Shareholder or the Leased
Premises as a result of the Company's or Shareholders' acts or omissions.
(e) Product Warranty. Each product manufactured, sold, or
delivered by Company has been in conformity with all applicable contractual
commitments and all express and implied warranties, and Company has no Liability
(and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability) for replacement or repair thereof or other damages
in connection therewith, subject only to the reserve for product warranty claims
set forth on the face of the balance sheet of the most recent Financial
Statements (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
Company. No product manufactured, sold, or delivered by Company is subject to
any guaranty, warranty, or other indemnity beyond the applicable standard terms
and conditions of sale. Schedule 2.5(e) includes copies of the standard terms
and conditions of sale for Company (containing applicable guaranty, warranty,
and indemnity provisions).
(f) Product Liability. Company has no Liability (and there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against Company giving rise
to any Liability) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product manufactured, sold,
or delivered by Company.
(g) Health and Safety. Company has received no notice of any
violation, nor, to the Knowledge of Company and Shareholder, is there any basis
for any assertion of a violation by Company, of the Occupational Safety and
Health Act of 1970, as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
changes thereunder) of federal, state and local governments (and all agencies
thereof) concerning public health and safety or employee health and safety laws.
2.6 Employment Matters
(a) None of Company's employees belongs to a labor union in
connection with his or her employment by Company nor has there been any request
by any employee to be represented by a union in such connection.
(b) Except as identified on Schedule 2.6(b) attached hereto, no
officer, manager or key employee of Company has indicated within the past twelve
(12) months that he or she may terminate his or her employment with Company
(regardless of whether such indication was formal or informal).
(c) Schedule 2.6(c) attached hereto sets forth the names of all
Company's directors and officers, and the names of all persons whose
compensation from Company during the current year will exceed Twenty-Five
Thousand Dollars ($25,000).
(d) Schedule 2.6(d) attached hereto contains a list of each
pension, retirement, profit-sharing, deferred compensation, bonus or other
incentive plan, employee program, arrangement, agreement or understanding,
medical, vision, dental or other health plan, life insurance plan, severance
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plan or any other employee benefit plan to which Company or any entity under
common control with the Company contributes or is a party or is bound and under
which current or former employees of Company are eligible to participate or
derive a benefit.
(e) Company does not maintain, never has maintained or
contributed to, and has never been required to contribute to any Employee
Benefit Plan or has any Liability under any Employee Benefit Plan.
(f) Company does not contribute to, never has contributed to, and
has never been required to contribute to any multiemployer plan or has any
Liability (including withdrawal liability) under any multiemployer plan.
2.7 Continuity of Interest. Shareholder has no present plan, intention
or arrangement to dispose of any of the Restricted Shares in a manner that would
cause the Merger to violate the continuity of shareholder interest requirement
set forth in Treasury Regulation Section 1.368-1.
2.8 Tax Free Reorganization. This Agreement and the transactions
contemplated herein qualify, in all respects, as a tax free reorganization
pursuant to Code Section 368(a)(2)(D).
2.9 Real Property and Real Property Improvements. Except as set forth in
the Leases described in Section 6.2, below, Bristol, Purchaser and Surviving
Corporation (i) have no interest of any nature whatsoever in that certain real
property and real property improvements utilized by the Company as its two (2)
primary office facilities, which facilities are located at (a) 150 South
Madison, Greenwood, Indiana 46142; and (b) 1247 South Shelby, Louisville,
Kentucky 40203 (collectively, the "Facilities"); and (ii) have no Liability of
any nature whatsoever, including Tax Liability, arising from or related to (a)
the Facilities, (b) the transfer of the Facilities by Company to Shareholder or
an entity owned by Shareholder, or (c) any loans secured by the Facilities
(including but not limited to any loans made or guaranteed by or through the
SBA).
2.10 Brokers. No broker, finder or investment banker has acted directly
or indirectly for Company or any of its officers or directors, or for
Shareholder in connection with this Agreement or the transactions contemplated
hereby, and no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of Company or
Shareholder.
2.11 Disclosure. No representation or warranty by Company or Shareholder
in this Agreement or in any other certificate or document delivered to Purchaser
and Bristol and their representatives contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact which has not been
disclosed to Purchaser and/or Bristol which has had or is likely to have a
Materially Adverse Effect on Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represents and warrants to, and agrees with, Company
and Shareholder that (except for changes contemplated by this Agreement), each
of the following statements is true, correct and complete as of the date of this
Agreement and will be true correct and complete as of the Closing Date (each
such statement to be made again by Purchaser on that date with the Closing Date
being substituted for the date of this Agreement throughout this Article 3):
3.1 Organization and Authority.
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(a) Purchaser and Bristol are corporations duly organized,
validly existing and in good standing under the laws of the States of Kentucky
and Delaware, respectively, have all requisite corporate power and authority to
carry on their respective businesses as currently conducted and to own or lease
and operate their respective properties, and are duly qualified to do business
as foreign corporations in each jurisdiction where their respective businesses
makes such qualification necessary. Purchaser and Bristol have the requisite
power to enter into this Agreement and to carry out their respective obligations
hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by Purchaser's and Bristol's respective Boards of Directors, and no other
proceedings on the part of Purchaser or Bristol are necessary to authorize this
Agreement and the transactions contemplated hereby, and this Agreement is a
valid and binding obligation of Purchaser and Bristol enforceable in accordance
with its terms except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors rights generally and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(c) Except as set forth on Schedule 3.1(c)(1) attached hereto, no
consent, approval or authorization of, or declaration, filing or registration
with, any third party, including any government or regulatory authority, is
required in connection with the execution and delivery by Purchaser and Bristol
of this Agreement and the consummation by Purchaser and Bristol of the
transactions contemplated hereby. Except as set forth on Schedule 3.1(c)(2)
attached hereto, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) conflict with,
result in a breach of or constitute a default under any of the terms, conditions
or provisions of the Certificate of Incorporation or By-laws of Purchaser or
Bristol; (ii) violate any law, order, judgment or decree to which any of
Purchaser's or Bristol's properties or assets are bound; (iii) violate or
constitute a default under (whether after the giving of notice, passage of time
or both), or permit the termination of, or impair any rights or increase any
obligations of Purchaser or Bristol under, any agreement or instrument to which
Purchaser or Bristol is a party or by which any part of Purchaser's or Bristol's
properties or assets are bound; or (iv) result in the acceleration of the
maturity of any debt or obligation of Purchaser or Bristol, or in the creation
or imposition of any Encumbrance upon any of the properties or assets of
Purchaser or Bristol.
3.2 Brokers. No broker, finder or investment banker has acted directly
or indirectly for Purchaser or Bristol, or any of their officers or directors in
connection with this Agreement or the transactions contemplated hereby, and no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Purchaser or Bristol.
3.3 Disclosure. No representation or warranty by Purchaser or Bristol in
this Agreement or in any other certificate or document delivered to Company and
Shareholder and their representatives contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading.
3.4 Company Employees. Neither Bristol nor Purchaser make any
representation or warranty about the continued employment of Company's employees
by Surviving Corporation. Each such employee shall be reviewed independently by
Surviving Corporation which shall have the right to employ or terminate such
employee in its absolute and sole discretion. To the extent Surviving
Corporation determines to employ any former Company employee, such employee
shall execute Surviving Corporation's standard employment agreement which shall
contain such terms and conditions as such employee and Surviving Corporation
negotiate. Neither Bristol nor Purchaser nor Surviving Corporation shall be
responsible for, obligated under or incur any Liability in connection with any
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employment agreement or any bonus, insurance, pension, employee benefit
(including accrued vacation) or other compensation or benefit arrangement
between Company and any employee of Company.
ARTICLE 4
COVENANTS
4.1 General. Each of the parties hereto shall use its best efforts to
take all action and to do all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the conditions to close set forth in
Article 5, below).
4.2 Notices and Consents. Company shall give all notices to third
parties and shall obtain prior to the Closing Date all third party consents
which are necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement. Company's obligations to obtain
third party consents shall include, but not be limited to (i) the consents of
manufacturers (including Micros) to the assignment to and assumption by
Surviving Corporation of all manufacturing agreements between such manufacturers
and Company, without default, modification or amendment thereof; (ii) the
consents of all lenders, including the SBA, whose loans are secured by the
Facilities, or either of them, to the transfer of the Facilities on or before
the Closing Date by Company to Shareholder or an entity owned by Shareholder;
and (iii) the consents of all lenders, including the SBA, to the assignment to
and assumption by Shareholder of all loans secured by the Facilities, or either
of them, and the release of Company from all such loan obligations.
4.3 Regulatory Matters and Approvals. Each of the parties shall give all
notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Sections 2.1(e) and 3.1(c), above,
or elsewhere in this Agreement.
4.4 Continuity of Interest. Shareholder shall not dispose of any of the
Restricted Shares in a manner that would cause the Merger to violate the
continuity of shareholder interest requirement set forth in Treasury Regulation
Section 1.368-1. If Shareholder desires to dispose of any of the Restricted
Shares, then he shall provide written notice to Bristol, not less than sixty
(60) days prior to the intended date of disposition, specifying the number of
Restricted Shares that Shareholder desires to dispose.
4.5 Continuity of Business. Purchaser shall continue at least one
significant historical business line of Company, or use at least a significant
portion of Company's historical business assets in a business, in each case in
accordance with Treasury Regulation Section 1.368-1(d).
4.6 Tax Free Reorganization. Shareholder shall assume any and all
Liability, including any and all Tax Liability, caused by, arising from, or
related to the failure of the Merger to qualify, in any respects, as a tax-free
reorganization pursuant to Code Section 368(a)(2)(D), including any and all
Liability incurred by Purchaser, Surviving Corporation and/or Bristol as a
result of such failure. In addition to all other remedies provided to Purchaser,
Surviving Corporation, and Bristol, whether in this Agreement, at law, in equity
or otherwise, such parties shall also have the right to offset any such
Liability from and against the fee and/or commission provisions set forth in
Shareholder's Independent Contractor Agreement described in Section 6.2, below.
4.7 Registration and Listing of Restricted Shares. After the second
anniversary of the Closing Date (or after such earlier date allowable under the
continuity of shareholder interest requirement set forth in the applicable
Treasury Regulation Section), Bristol shall forthwith use its best efforts to
cause the Restricted Shares to be (i) registered with the Securities and
Exchange Commission; and (ii) approved for listing and transfer on the NASDAQ
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stock exchange or on such other stock exchange as Bristol's publicly traded
securities are then listed.
4.8 Operation of Business. From the date of this Agreement, Company
shall not engage in any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business. Without limiting the generality of the
foregoing:
(a) Company shall not authorize or effect any change in its
Certificate of Incorporation or By-laws;
(b) Company shall not grant any options, warrants, or other
rights to purchase or obtain any of its capital stock or issue, sell, or
otherwise dispose of any of its capital stock;
(c) Company shall not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in kind), or
redeem, purchase, or otherwise acquire any of its capital stock; provided,
however, that Company (i) may make a cash distribution to Shareholder prior to
the Closing Date (subject to the purchase price adjustments of Section 1.5 and
1.6, above); and (ii) shall transfer to Shareholder the Facilities and all loans
secured by the Facilities in accordance with Sections 4.2, above, and 4.10,
below;
(d) Company shall not issue any note, bond or other debt security
or create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation;
(e) Company shall not impose, or allow to be imposed, any
Encumbrance upon any of its assets;
(f) Company shall not make any capital investment in, make any
loan to, or acquire the securities or assets of any person or entity;
(g) Company shall not make any change in the terms and conditions
of employment for any of its directors, officers, and employees; and
(h) Company shall not commit to do any of the foregoing.
4.9 Company Employees. Company shall terminate all of its agreements
with its employees (including all employment agreements and all bonus,
insurance, pension, benefit, and other compensation or benefit plans or
agreements) on or prior to the Effective Time.
4.10 Real Property and Real Property Improvements. Prior to the Closing
Date, (i) Company shall cause the Facilities to be transferred to Shareholder;
and (ii) Shareholder shall assume all loans secured by the Facilities (including
any loans made or guaranteed by the SBA), in each case in a manner pre-approved
by Bristol in its absolute and sole discretion. Shareholder expressly agrees
that he shall indemnify, defend and hold harmless Bristol, Purchaser or
Surviving Corporation from any and all Liability, including Tax Liability,
arising from or related to the Facilities or the transfer of the Facilities from
Company to Shareholder or an entity owned by Shareholder, provided, however,
that this indemnity specifically excludes all Liability expressly incurred by
Surviving Corporation under those certain Leases described in Section in Section
6.2, below. If Bristol, Purchaser or Surviving Corporation incur any Liability
required to be indemnified by Shareholder under this Section 4.10, then, in
addition to any other right or remedy available to Bristol, Purchaser or
Surviving Corporation under this indemnity, under the other provisions of this
Agreement, at law, in equity or otherwise, Bristol, Purchaser and/or Surviving
Corporation shall have the right to offset such Liability against any fees or
commissions otherwise due Shareholder under that certain Independent Contractor
Agreement described in Section 6.2, below.
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4.11 Full Access. Company shall permit representatives of Bristol and
Purchaser to have full access to all personnel, premises, properties, books,
records (including tax records), accounts, contracts, and documents of or
pertaining to Company. Purchaser and Bristol shall treat and hold as such any
Confidential Information they receive from Company in the course of the due
diligence investigation contemplated by this section 4.11, shall not use any of
the Confidential Information except in connection with the transactions
contemplated by this Agreement, and, if this Agreement is terminated for any
reason whatsoever, shall return to Company all tangible embodiments (and all
copies) thereof which are in their possession.
4.12 Notice of Developments. Each party hereto shall give prompt written
notice to the other of any material adverse development causing a breach of any
of its own representations and warranties in Articles 2 and 3, above, or the
breach of any of its own covenants in this Article 4. No disclosure by any party
pursuant to this Section 4.12, however, shall be deemed to amend or supplement
the Schedules hereto or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
4.13 Exclusivity. Company shall not solicit, initiate, or encourage the
submission of any proposal or offer from any person or entity relating to the
acquisition of all or substantially all of the capital stock or assets of
Company.
ARTICLE 5
CONDITIONS TO CLOSE
5.1 Conditions to Obligations of Bristol and Purchaser to Close. The
obligations of Bristol and Purchaser to consummate the transactions to be
performed by them on or prior to the Closing Date are subject to the
satisfaction of the following conditions:
(a) This Agreement and the Merger shall have been approved by the
Board of Directors and shareholder of Company;
(b) The representations and warranties set forth in Article 2,
above, shall be true and correct in all material respects on and as of the
Closing Date;
(c) Company and Shareholder shall have performed and complied
with all of their covenants hereunder in all material respects through the
Closing Date;
(d) Company shall have obtained all third party consents that are
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including, but not limited to, the consents
specifically set forth in Section 4.2, above;
(e) Company and Shareholder shall have made their respective
delivery obligations set forth in Article 6, below;
(f) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement;
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation; or (iii) affect adversely the right of
Surviving Corporation to own the former assets and to operate the former
businesses of Company, and no such injunction, judgment, order, decree, ruling
or charge shall be in effect;
(g) Company shall have completed and delivered the Schedules to
this Agreement and the information contained in such Schedules shall be
satisfactory to Purchaser and Bristol in their absolute and sole discretion;
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(h) Bristol and Purchaser shall have completed their due
diligence investigation of Company and shall be satisfied with the results of
such investigation in their absolute and sole discretion;
(i) Ernst & Young, LLP shall have confirmed in writing to Bristol
on or prior to the Closing Date that (i) Company is capable of being audited in
accordance with GAAP; and (ii) that Ernst & Young, LLP is capable of completing
such audit not later than sixty (60) days following the Closing Date. In
addition, Bristol must determine in its absolute and sole discretion that the
cost of such audit is reasonable.
(j) Purchaser and Shareholder shall have entered into Lease
Agreements, pursuant to which Purchaser shall lease the Facilities from
Shareholder on such terms and conditions as the parties shall mutually agree;
provided, however, that such terms and conditions shall be reasonably consistent
with the terms and conditions discussed by the parties prior to the execution of
this Agreement.
(k) Shareholder shall, prior to Closing, have obtained appraisals
for each of the Facilities, and, based upon such appraisals, shall be reasonably
satisfied that Purchaser is acquiring at least ninety percent (90%) of Company's
net assets and seventy percent (70%) of Company's gross assets, after taking
into account the transfer of the Facilities to Shareholder and the assumption of
all loans secured by the Facility by Shareholder.
(l) All actions to be taken by Company and Shareholder in
connection with the consummation of the transactions contemplated herein and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated herein shall be satisfactory in form and substance to
Bristol and Purchaser in their absolute and sole discretion.
Bristol and Purchaser may waive any condition specified in this Section 5.1 if
they execute a writing so stating on or prior to the Closing Date.
5.2 Conditions to Obligations of Company and Shareholder to Close. The
obligations of Company and Shareholder to consummate the transactions to be
performed by them on or prior to the Closing Date are subject to satisfaction of
the following conditions:
(a) The representations and warranties set forth in Article 3,
above, shall be true and correct in all material respects on and as of the
Closing Date;
(b) Bristol and Purchaser shall have performed and complied with
all of their covenants hereunder in all material respects through the Closing
Date;
(c) Bristol and Purchaser shall have made their respective
delivery obligations set forth in Article 6, below;
(d) There shall not be any injunction, judgment, order, decree,
ruling or charge in effect against Bristol or Purchaser preventing the
consummation of any of the transactions contemplated by this Agreement; and
(e) Purchaser and Shareholder shall have entered into Lease
Agreements, pursuant to which Purchaser shall lease the Facilities from
Shareholder on such terms and conditions as the parties shall mutually agree;
provided, however, that such terms and conditions shall be reasonably consistent
with the terms and conditions discussed by the parties prior to the execution of
this Agreement.
(f) Shareholder shall, prior to Closing, have obtained appraisals
for each of the Facilities, and, based upon such appraisals, shall be reasonably
satisfied that Purchaser is acquiring at least ninety percent (90%) of Company's
net assets and seventy percent (70%) of Company's gross assets,
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after taking into account the transfer of the Facilities to Shareholder and the
assumption of all loans secured by the Facility by Shareholder.
(g) All actions to be taken by Bristol and Purchaser in
connection with the consummation of the transactions contemplated by this
Agreement and all certificates, instruments, and other documents required to
effect the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to Company and Shareholder.
Company and Shareholder may waive any condition in this Section 5.2 if they
execute a writing so stating on or prior to the Closing Date.
ARTICLE 6
DELIVERIES ON OR PRIOR TO THE CLOSING DATE
6.1 Deliveries Subject to Filing of Certificates. All deliveries to be
made pursuant to this Article 6 shall, to the extent appropriate, be prepared in
such a manner so as to become effective only upon the filing of the Certificates
in accordance with Section 1.1, above.
6.2 Mutual Deliveries. On or prior to the Closing Date, (i) Bristol,
Purchaser and Shareholder shall deliver to each other Shareholder's Independent
Contractor Agreement with Surviving Corporation in substantially the form set
forth as Exhibit "D" attached hereto; (ii) Bristol, Purchaser and Shareholder
shall deliver to each other the Escrow Agreement; (iii) Purchaser and Company
shall deliver to each other the Certificates; and (iv) Purchaser and Company
shall deliver to each other the Lease Agreements described in Sections 5.1(j)
and 5.2(e), above, which, when executed, shall be attached hereto as Exhibits
"E-1" and "E-2."
6.3 Deliveries by Company. Not less than ten (10) days prior to the
Closing Date, Shareholder shall cause Company to deliver to Purchaser and
Bristol the Schedules to this Agreement. On or prior to the Closing Date,
Shareholder shall cause Company to deliver to Purchaser and Bristol (i) a
certificate stating that the representations and warranties of Company contained
in this Agreement are true and correct on and as of the Closing Date as though
made at and as of that date (except where such representation and warranty is
made as of a date specifically set forth therein); (ii) a copy of the
Certificate of Incorporation, as amended, and By-laws of Company as then in
effect, an incumbency certificate, and resolutions of the Board of Directors and
shareholders of Company approving the Agreement and authorizing the performance
of the transactions contemplated hereby, all as certified by the Secretary of
Company; (iii) a long-form good standing certificate dated as of or within
fifteen (15) business days of the Closing Date from the Secretary of State of
the State of Indiana; (iv) the legal opinion of Company's counsel in a form
reasonably satisfactory to Bristol, Purchaser, Company and Shareholder, which,
when approved, will be attached hereto as Exhibit "F;" (v) the resignations,
effective as of the Closing Date, of each director and officer of Company; and
(vi) such other documents as Purchaser may reasonably request for the purposes
of consummating the transactions contemplated hereby.
6.4 Deliveries by Shareholder. On or prior to the Closing Date,
Shareholder shall deliver to Bristol and Purchaser (i) that certain General
Release in substantially the form of Exhibit "G" hereto; (ii) the certificate(s)
representing all of the Company Shares owned by Shareholder, duly endorsed for
surrender and cancellation; (iii) a certificate stating that the representations
and warranties of Shareholder contained in this Agreement are true and correct
on and as of the Closing Date as though made at and as of that date (except
where such representation and warranty is made as of a date specifically set
forth therein); (iv) his resignation as a director and officer of Company; and
(v) such other documents as Purchaser may reasonably request for the purposes of
consummating the transactions contemplated herein.
6.5 Deliveries by Purchaser. On or prior to the Closing Date, Purchaser
shall deliver to Shareholder (i) a certificate stating that the representations
and warranties of Purchaser contained in this Agreement are true
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and correct on and as of the Closing Date as though made at and as of that date
(except where such representation and warranty is made as of a date specifically
set forth therein); (ii) a copy of the Certificate of Incorporation, as amended,
and By-laws of Purchaser as then in effect, and resolutions of the Board of
Directors of Purchaser approving the Agreement and authorizing the performance
of the transactions contemplated herein, all as certified by the Secretary of
Purchaser; (iii) a long-form good standing certificate dated as of or within
fifteen (15) business days of the Effective Date from the Secretary of State of
the State of Kentucky; and (iv) such other documents as Shareholder may
reasonably request for the purposes of consummating the transactions
contemplated hereby. Immediately after the Effective Time and on the Closing
Date, Purchaser shall deliver to (i) Shareholder Three Hundred Thirty-Seven
Thousand Dollars ($337,000) in immediately available funds; and (ii) Escrow
Agent Sixty-Three Thousand Dollars ($63,000) in immediately available funds.
6.6 Deliveries by Bristol. On or prior to the Closing Date, Bristol
shall deliver to Shareholder (i) a copy of the resolutions of the Board of
Directors of Bristol approving the Agreement and authorizing the performance of
the transactions contemplated hereby, all as certified by the President of
Bristol; and (ii) such other documents as Shareholder may reasonably request for
the purposes of consummating the transactions contemplated herein. Immediately
after the Effective Time and on the Closing Date, Bristol shall deliver to (i)
Shareholder Four Hundred Sixty-Three Thousand Dollars ($463,000) worth of
Restricted Shares; and (ii) Escrow Agent Eighty-Seven Thousand Dollars ($87,000)
worth of Restricted Shares.
6.7 Waivers. A party may waive any deliveries to which it is entitled
pursuant to this Article 6 if it executes a writing so stating on or before the
Closing Date.
ARTICLE 7
INDEMNITIES
7.1 Indemnity by Purchaser and Bristol.
(a) Purchaser and Bristol hereby expressly and unequivocally
agree to indemnify, defend and hold harmless Shareholder and, prior to the
Closing Date, Company, from and against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, guaranties, liabilities, actions,
suits, damages and deficiencies, including without limitation, interest,
penalties, reasonable attorneys' fees and all amounts paid in settlement of any
claim, action or suit (all such claims, demands, losses, costs, expenses, etc.
being referred to herein collectively as "Claims") which are asserted against
Shareholder and/or, prior to the Closing Date, Company, or which Shareholder
and/or, prior to the Closing Date, Company, incurs or suffers, whether as a
result of third party claims or otherwise, and which arise out of, result from
or relate to (i) any failure by Bristol and Purchaser to fully perform in a
timely manner any agreement, covenant or obligation of Bristol and Purchaser
hereunder, or (ii) the existence or non-existence of any fact or circumstance
which is different from or inconsistent with or a breach of any representation
or warranty of Purchaser made herein, provided, however, that any insurance
proceeds payable to Shareholder and/or Company with respect to any
indemnification claim hereunder shall reduce Purchaser's and Bristol's
indemnification obligations, dollar for dollar.
(b) The indemnities provided for above shall not require payment
as a condition precedent to recovery.
7.2 Indemnity by Company and Shareholder.
(a) The Company and Shareholder hereby expressly and
unequivocally agree to indemnify, defend and hold harmless Bristol, Purchaser
and Surviving Corporation, and Bristol's, Purchaser's and Surviving
Corporation's officers, directors, employees, agents, affiliates, attorneys,
representatives and related entities (for purposes of this Section 7.2 only, the
"Indemnified Parties") from and against and in respect of any and all Claims
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<PAGE> 20
which are asserted against any Indemnified Party or which any Indemnified Party
incurs or suffers, whether as a result of third party claims or otherwise, and
which arise out of, result from or relate to (i) any failure by Company and/or
Shareholder to fully perform in a timely manner any agreement, covenant or
obligation of Company and Shareholder hereunder; (ii) the existence or
non-existence of any act or circumstance which is different from or inconsistent
with or a breach of any representation or warranty of Company and/or Shareholder
made herein; or (iii) the acts, omissions, statements, misstatements or other
business, properties and affairs of Company and Shareholder; provided, however,
that any insurance proceeds payable to Bristol or Surviving Corporation with
respect to any indemnification claim hereunder shall reduce Company's and
Shareholder's indemnification obligations, dollar for dollar.
(b) The indemnities provided for above shall not require payment
as a condition precedent to recovery.
7.3 Defense of Claims. If any party receives notice of the commencement
of any action or of the existence of any Claim or a written assertion of any
facts by a third party with respect to any matter that would give rise to a
Claim hereunder or otherwise suffers a loss for which such party is entitled to
be indemnified pursuant to Section 7.1 or Section 7.2, above, then that party
(the "Indemnified Party") shall give the party required to indemnify (the
"Indemnifying Party") reasonable notice thereof and shall permit the
Indemnifying Party to have reasonable access to relevant information in the
Indemnified Party's possession or control regarding such Claim. The Indemnifying
Party shall have the right to take all reasonable action, at its own expense, as
it deems desirable in order to minimize or eliminate such Claim. In the event of
a Claim requesting solely monetary damages, the Indemnifying Party shall have
the right, at its own expense, to appoint counsel to handle the defense of such
matter and the exclusive right to prosecute, defend, compromise, settle or pay
such Claim provided that the Indemnifying Party acknowledges in writing its
obligations and Liability for such Claim as between the parties hereto or
procures from the person making the Claim a full and complete release of the
Indemnified Parties which is satisfactory in form and substance to counsel for
the Indemnified Parties. If the foregoing acknowledgments or releases are not
furnished to the Indemnified Party, then they may appoint associate counsel to
participate in the defense of such matter at the expense of the Indemnifying
Party. If the person asserting the Claim requests relief other than or in
addition to monetary damages, then the Indemnifying Party may not settle any
aspects of such Claim requesting relief other than monetary damages without the
Indemnified Parties' prior written consent, which consent shall be subject only
to their obligation to act in good faith.
7.4 Parties to Litigation. Company and Shareholder agree not to assert
any Claim of the type described in Section 7.1, above, against the individual
officers and directors of Surviving Corporation, Bristol or Purchaser, or any of
them, unless (i) such a Claim is based upon good faith allegations, plead with
specificity, of intentional misconduct of such officers and directors, or any of
them, for any actions taken or omissions made at any time by such officers and
directors in their respective capacities, or (ii) it is determined that the such
officers and directors, or any of them, are indispensable parties to any lawsuit
in which such Claims asserted, or (iii) a court determines on its own motion
that such officers and directors, or any of them, are necessary parties to any
lawsuit in which such Claim is asserted.
7.5 Remedies Not Exclusive. The remedies provided in this Article 7
shall be in addition to, and not in lieu of, any other remedies which a party
may have at law, in equity or otherwise.
ARTICLE 8
TERMINATION
8.1 Termination of Agreement. This Agreement and the transactions
contemplated herein may be terminated as follows:
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(a) By the mutual written consent of the parties hereto at any
time prior to the Effective Time;
(b) By Bristol and/or Purchaser by giving oral or written notice
to Company and Shareholder at any time prior to the Effective Time (i) in the
event Company or Shareholder has breached any representation, warranty, or
covenant contained in this Agreement; or (ii) in the event of the failure of a
condition to close set forth in Section 5.1, above; and
(c) By Company and/or Shareholder by giving oral or written
notice to Bristol and Purchaser at any time prior to the Effective Time (i) in
the event Bristol and/or Purchaser has breached any material representation,
warranty, covenant contained in this Agreement in any material respect; or (ii)
in the event of the failure of a condition set forth in Section 5.2, above.
8.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 8.1, above, then all rights and obligations of the parties
hereto shall terminate without any Liability of any party to any other party
(except for any Liability of any party then in breach); provided, however, that
the confidentially provisions contained in Section 4.11, above, shall survive
any such termination.
ARTICLE 9
GENERAL PROVISIONS
9.1 Publicity. After the Effective Time and except as may otherwise be
required by law (i) Bristol shall determine the timing and content of any press
release or public announcement relating to the transactions contemplated by this
Agreement; and (ii) Bristol, Surviving Corporation and Shareholder shall
determine the timing and content of any announcements to Company's customers,
suppliers, licensors, licensees or employees relating to the transactions
contemplated by this Agreement and no such announcement shall be made without
the prior written consent of such parties.
9.2 Complete Agreement; Modifications. This Agreement and any documents
referred to herein or executed in connection herewith constitute the parties'
entire agreement with respect to the subject matter hereof and supersede all
agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may not be amended, altered or modified except by a
writing signed by the parties.
9.3 Additional Documents. Each party hereto agrees to execute,
acknowledge and deliver any and all further documents, instruments,
certificates, agreements and other writings and to perform such other actions
which may be or become necessary or expedient to effectuate and carry out this
Agreement.
9.4 Notices. Unless otherwise specifically permitted by this Agreement,
all notices under this Agreement shall be in writing and shall be delivered by
personal service, telecopy, federal express or comparable overnight service or
certified mail (if such service is not available, then by first class mail),
postage prepaid, to such address as may be designated from time to time by the
relevant party. Any notice sent by certified mail shall be deemed to have been
given three (3) days after the date on which it is mailed. All other notices
shall be deemed given when received. No objection may be made to the manner of
delivery of any notice actually received in writing by an authorized agent of a
party. The initial addresses of the parties shall be as follows:
IF TO BRISTOL: WITH A COPY TO:
Bristol Technology Systems, Inc. Cameron M. Smith, Jr.
18201 Von Karman, Suite 305 Smith, Silbar, Duffy,
Irvine, CA 92612 Parker & Woffinden, LLP
Attn: Mr. Richard Walker 19100 Von Karman,
President Suite 400
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Irvine, CA 92612
Tel: (714) 475-0800
Fax: (714) 475-0808 Tel: (714) 263-8066
Fax: (714) 263-8073
IF TO PURCHASER: WITH A COPY TO:
Cash Registers, Inc. Cameron M. Smith, Jr.
503 North Main Street [Same as above]
London, Kentucky 40741
Attn: Muarice R. Johnson
President
IF TO SHAREHOLDER: WITH A COPY TO:
Floyd Shirrell Lee Robbins, Esq.
425 South Creek Drive Williams, Hewitt & Robbins
Indianapolis, Indiana 46217 P.O. Box 405
Greenwood, Indiana 46142
Tel: (317) 889-8980
Fax: (317) 887-4069 Tel: (317) 888-1121
Fax: (317) 887-4069
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IF TO COMPANY: WITH A COPY TO:
Electronic Business Lee Robbins, Esq.
Machines, Inc. [Same as above]
150 South Madison
Greenwood, Indiana 46142
Attn: Floyd Shirrell
Tel: (317) 881-8276
Fax: (317) 887-8376
9.5 No Third Persons or Entities. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any third person or
entity; provided, however, that Bristol shall be a third party beneficiary of
all rights of Purchaser and Surviving Corporation hereunder.
9.6 Governing Law; Jurisdiction. This Agreement, the respective rights,
obligations and remedies of the parties hereunder, the interpretation hereof and
all disputes, controversies and Liabilities arising out of or related to this
Agreement or the relationship between the parties created hereby shall be
governed by and construed in accordance with the internal laws of the State of
Kentucky without reference to its principles of conflict of laws.
9.7 Attorneys' Fees. Should any litigation or arbitration be commenced
(including any proceedings in a bankruptcy court) between the parties hereto or
their representatives concerning any provision of this Agreement or the rights
and duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the reasonable attorneys' fees and court costs incurred by reason of
or in connection with such litigation or arbitration.
9.8 Post-Judgment Attorneys' Fees. The prevailing party in any legal
action or other proceeding between the parties regarding this Agreement or the
subject matter hereof shall be entitled, in addition to and separately from the
amounts recoverable under Section 9.7, to the payment by the losing party of the
prevailing party's reasonable attorneys' fees, court costs, and litigation
expenses incurred in connection with (i) any appellate review of the judgment
rendered in such action or of any other ruling in such action; and (ii) any
proceeding to enforce, collect or execute upon a judgment in such action. It is
the intent of the parties that the provisions of this Section 9.8 be distinct
and severable from the other rights of the parties under this Agreement, shall
survive the entry of judgment in any action and shall not be merged into such
judgment.
9.9 Successors and Assigns. Neither this Agreement nor any rights or
obligations hereunder may be assigned, transferred or delegated by operation of
law or otherwise, without the prior written consent of the other parties hereto.
Subject to the above, this Agreement shall inure to the benefit of the parties'
respective successors and assigns.
9.10 Survival of Warranties. Each representation and warranty contained
herein shall survive the Closing Date for a period of three (3) years following
the Closing Date. The right to indemnification pursuant to this Agreement shall
survive any investigation made by the parties or their representatives, lenders
or investors, or the receipt of any opinion or certificate.
9.11 Joint and Several Liability. Notwithstanding any provision of this
Agreement to the contrary, the Liability of Company and Shareholder arising
prior to the Effective Time for the representations and warranties made by, and
the covenants and indemnification obligations imposed upon Company and
Shareholder or either of them under this Agreement shall be joint and several.
The Liability of Company shall terminate at the Effective Time. Notwithstanding
any provision of this Agreement to the contrary, the Liability of Purchaser and
Bristol for the representations and warranties made by, and the covenants and
indemnification obligations imposed upon Purchaser and Bristol or either of them
under this Agreement shall be joint and several.
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9.12 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy will be cumulative and will be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies will not
constitute a waiver of the right to pursue other available remedies.
9.13 Expenses. Each party shall pay all of the costs and expenses
incurred by such party in connection with the authorization, preparation,
execution and performance of this Agreement, including, without limitation, all
fees and expenses of its agents, representatives, counsel and accountants.
9.14 Waivers Strictly Construed. With regard to any power, remedy or
right provided herein or otherwise available to any party hereunder (i) no
waiver or extension of time shall be effective unless expressly contained in a
writing signed by the waiving party; and (ii) no alteration, modification or
impairment shall be implied by reason of any previous waiver, extension of time,
delay or omission in exercise, or by any other indulgence.
9.15 Rules of Construction. The Article and Section headings in this
Agreement are inserted only as a matter of convenience, and in no way define,
limit, or interpret the scope of this Agreement or of any particular Article or
Section. Throughout this Agreement, as the context may require, the singular
tense and number includes the plural, and the plural tense and number includes
the singular. The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the content requires otherwise. The word "including" shall
mean including without limitation. The parties intend that each representation,
warranty, or covenant contained herein shall have independent significance.
9.16 Severability. If any provision, clause or application of this
Agreement is determined by a court of competent jurisdiction or arbitrator to be
invalid or unenforceable for any reason whatsoever, (i) this Agreement shall
remain binding and in full force and effect to the maximum extent permitted
under applicable law, except for such invalidated or unenforceable provision,
clause or application; (ii) the parties shall negotiate in good faith to provide
adjustments to ameliorate any injustice or frustration of purpose resulting
therefrom in a manner consistent with the original intent of the parties; and
(iii) if the parties are unable to agree upon such adjustments, then the invalid
or unenforceable provision, clause or application shall be modified and reformed
by such court or arbitrator so that it is valid and enforceable in a manner that
comes the closest to expressing the original intention of the parties with
respect thereto, and each party hereto agrees to be bound by any such
modification and reformation with the same force and effect as if such
modification and reformation were contained in this Agreement in the first
instance.
9.17 Funds. Any requirement in this Agreement to pay immediately
available funds may be satisfied by delivery of a certified or cashier's check
in the applicable amount or by wiring to an account designated by the recipient
the applicable amount.
9.18 Exhibits and Schedules. All Exhibits and Schedules attached hereto
are hereby incorporated in and made a part of this Agreement as if fully set
forth herein.
9.19 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
"BRISTOL" "COMPANY"
BRISTOL TECHNOLOGY SYSTEMS, ELECTRONIC BUSINESS, INC., a Delaware
corporation MACHINES, INC., an
Indiana corporation
By:________________________ By:______________________
Gregory S. Lane, Vice Floyd Shirrell,
President and General President
Counsel
"PURCHASER" "SHAREHOLDER"
CASH REGISTERS, INC.
a Kentucky Corporation
_________________________
Floyd Shirrell
By:_________________________
Maurice R. Johnson,
President
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<PAGE> 1
EXHIBIT 10.35
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment")
is dated as of June 5, 1997, by and among BRISTOL TECHNOLOGY SYSTEMS, INC., a
Delaware corporation ("Bristol"); CASH REGISTERS, INCORPORATED, a Kentucky
corporation ("Purchaser"); FLOYD SHIRRELL, a resident of the State of Indiana
("Shareholder"); and ELECTRONIC BUSINESS MACHINES, INC., an Indiana Corporation
("Company").
RECITALS
WHEREAS, the parties hereto entered into that certain Agreement and Plan
of Merger, dated April 14, 1997 (the "Merger Agreement"), pursuant to which
Company is to merge with and into Purchaser in a tax-free reorganization.
WHEREAS, the parties hereto now desire to amend the Merger Agreement
pursuant to the terms and conditions provided below.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained and contained in the Merger
Agreement, the parties hereto agree to amend the Merger Agreement as follows:
1. Closing; Purchase Price Adjustments.
A. Section 1.1 of the Merger Agreement shall be amended in that the term
"Closing Date" shall be redefined to mean the date the Certificates are filed,
which shall be the later of (i) June 6, 1997, or (ii) the date on which the
Company and/or Purchaser obtains financing in an amount necessary to pay on the
Closing Date the aggregate balance owed by the Company to Micros as of that
date; provided, however, that if the Merger does not close by June 11, 1997,
then the Merger Agreement and this Agreement shall terminate, which termination
shall be by mutual agreement of the parties.
B. Section 1.4 of the Merger Agreement shall be amended and restated in
its entirety as follows:
"1.4 Closing. If the conditions to close, as set forth in Article 5, below,
are satisfied, then the parties hereto shall meet on the Closing Date at the
offices of Company, located at 150 South Madison, Greenwood, Indiana 46142,
commencing at 9:00 a.m. local time (the "Closing"), or at such other place
or in such other manner as the parties shall mutually agree. At the Closing,
Purchaser and Company shall file the Certificates and, thereafter (and on
the Closing Date) (i) Purchaser shall deliver to Shareholder Three Hundred
Thirty-Seven Thousand Dollars ($337,000) in immediately available funds; and
(ii) Bristol shall deliver to Shareholder Four Hundred Sixty-Three Thousand
Dollars ($463,000) worth of Restricted Stock.(1) In addition, (i) Purchaser
shall deposit with Williams, Hewitt & Robbins, LLP (the "Escrow Agent")
Sixty-Three Thousand Dollars ($63,000) in immediately available funds; and
(ii) Bristol shall deposit with Escrow Agent Eighty-Seven Thousand Dollars
($87,000) worth of Restricted Stock. Escrow Agent shall (i) hold the cash
and the Restricted Shares in an Escrow Account substantially in the form of
Exhibit "C" hereto (the "Escrow Agreement"); and (ii) distribute the cash
and the Restricted Shares in accordance with the Escrow Agreement and
Section
______________________________
(1) The exact number of shares of Restricted Stock which Bristol is to
deliver to Shareholder on the Closing Date (which shall be rounded down to the
nearest whole number of shares) shall be determined by and based upon the
average of the May 23, 1997and May 27, 1997 closing price of Bristol's publicly
traded Common Stock as reported in the Wall Street Journal (i.e. 3 15/16). The
Restricted Stock delivered by Bristol to Shareholder on the Closing Date shall
hereinafter be referred to as the "Restricted Shares."
<PAGE> 2
1.5, below. In addition to the above, seventy-five (75) days after
the Closing Date, (i) Purchaser shall deliver to Shareholder an additional
Twenty-One Thousand Fifty-Two Dollars and Fifty Cents ($21,052.50) in
immediately available funds; and (ii) Bristol shall deliver to Purchaser
Twenty-Eight Thousand Nine Hundred Forty-Seven Dollars and Fifty Cents
($28,947.50) worth of Restricted Stock."
C. Section 1.7 of the Merger Agreement shall be deleted in its entirety.
2. Representations and Warranties.
A. The first sentence of Section 2.4(a) of the Merger Agreement shall be
amended and restated in its entirety as follows: "As of the first day
immediately following the Closing Date, the Company shall own no real property."
B. Section 2.5(d) of the Merger Agreement shall be amended in that the
environmental representations and warranties contained in such Section shall be
interpreted to apply to all real property owned and/or leased by the Company on
or prior to the day immediately following the Closing Date.
C. Section 2.9 of the Merger Agreement shall be amended in that the
representations and warranties contained in such Section shall be interpreted to
apply only to the period following the day immediately subsequent to the Closing
Date.
3. Covenants.
A. Section 4.10 of the Merger Agreement shall be amended and restated in
its entirety as follows:
"On the day immediately following the Closing Date, (i) Surviving
Corporation shall transfer the Facilities to F&J, LLC; and (ii) F&J, LLC
shall assume all loans secured by the Facilities (including any loans made
or guaranteed by the SBA), in each case in a manner pre-approved by Bristol
in its absolute and sole discretion. Shareholder acknowledges that Surviving
Corporation is retaining title to the Facilities for a period of one (1) day
following the Closing Date to simplify negotiations and to accommodate
Shareholder, and Shareholder expressly agrees that he will indemnify, defend
and hold harmless Bristol, Purchaser and Surviving Corporation from and
against any and all Liability, including Tax and environmental Liability,
arising from or related to the Facilities or the transfer of the Facilities
from Surviving Corporation to F&J, LLP, provided, however, that this
indemnity specifically excludes (i) the capital gains tax liability incurred
by Surviving Corporation in connection with the transfer of the Facilities
by Surviving Corporation to F&J, LLP on the day immediately following the
Closing Date; and (ii) all Liability expressly incurred by Surviving
Corporation under those certain Leases described in Section 6.2, below. If
Bristol, Purchaser or Surviving Corporation incur any Liability required to
be indemnified by Shareholder under this Section 4.10, then, in addition to
any other right or remedy available to Bristol, Purchaser or Surviving
Corporation under this indemnity, under the other provisions of this
Agreement, at law, in equity or otherwise, Bristol, Purchaser and/or
Surviving Corporation shall have the right to offset such Liability against
(i) any fees or commissions otherwise due Shareholder under that certain
Independent Contractor Agreement described in Section 6.2, below; or (ii)
any rental payments or other obligations due F&J, LLP under those certain
Leases described in Section 6.2, below."
4. Deliveries.
A. The following sentence shall be added to the end of Section 6.5 of
the Merger Agreement: "In addition, seventy-five (75) days following the Closing
Date, Purchaser shall deliver to Shareholder Twenty-One Thousand Fifty-Two
Dollars and Fifty Cents ($21,052.50) in immediately available funds."
B. The following sentence shall be added to the end of Section 6.6 of
the Merger Agreement: "In addition, seventy-five days following the Closing
Date, Bristol shall deliver to Shareholder
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Twenty-Eight Thousand Nine Hundred Forty-Seven Dollars and Fifty Cents
($28,947.50) worth of Restricted Stock."
5. Construction. Except as expressly amended herein, the terms and
conditions of the Merger Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
BRISTOL TECHNOLOGY SYSTEMS, ELECTRONIC BUSINESS MACHINES,
INC., a Delaware corporation INC., an Indiana corporation
By:____________________________ By:______________________________
Richard H. Walker, President Floyd Shirrell, President
CASH REGISTERS, INCORPORATED,
a Kentucky corporation
By:____________________________ By:______________________________
Maurice R. Johnson, President Floyd Shirrell
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<PAGE> 1
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT ("Agreement") is made and entered
into to be effective as of June 1, 1997 (the "Effective Date"), by and between
BRISTOL TECHNOLOGY SYSTEMS, INC., a Delaware corporation ("Bristol"), CASH
REGISTERS, INC., a Kentucky corporation ("Company"), and FLOYD SHIRRELL, a
resident of the State of Indiana ("Consultant").
RECITALS
WHEREAS, Bristol owns all of the outstanding capital stock of Company;
WHEREAS, pursuant and subject to the terms and conditions of that
certain Agreement and Plan of Merger, dated April 14, 1997 (the "Merger
Agreement"), by and among Bristol, Company, Consultant and Electronic Business
Machines, Inc., an Indiana corporation ("EBM"), EBM shall merge with and into
Company upon the filing of Certificates of Merger with the Secretaries of State
of the States of Kentucky and Indiana (the "Certificates");
WHEREAS, Company is a full service dealer of retail automation
equipment, including point of sale ("POS") systems, electronic cash registers
("ECRs"), and related hardware and software, to end users.
WHEREAS, Consultant has substantial skills, knowledge, expertise,
contacts and access to market opportunities and acquisition candidates which are
beneficial to Bristol and Company in their efforts establish a national network
of POS systems and ECR dealers.
WHEREAS, Company and Bristol desire to appoint Consultant, and
Consultant desires to accept such appointment, as an independent contractor to
procure acquisition candidates for Bristol and Company and to advise Company
with respect to certain market opportunities in connection with the sale and
service of POS systems and ECRs, all pursuant to the terms and conditions
provided below.
AGREEMENT
Accordingly, in consideration of the mutual covenants set forth below,
the parties hereto do hereby agree as follows:
1. Condition Precedent. This Agreement and the parties respective rights
and obligations herein are conditioned in their entirety upon the filing of the
Certificates.
2. Appointment. Company and Bristol hereby appoint Consultant, and
Consultant hereby accepts such appointment, as an independent contractor to (i)
procure acquisition candidates for Bristol, Company and their respective
subsidiaries; (ii) advise Company from time to time with respect to market,
sales and service opportunities for POS systems and ECRs; and (iii) such other
reasonable assignments as may be requested by the President of CRI from time to
time.
3. Term. Subject to the termination provisions set forth below, this
Agreement shall continue in full force and effect for a period of six (6) years
from the Effective Date.
4. Relationship of the Parties. Consultant is an independent contractor
with which Company and Bristol consults because of Consultant's skills,
expertise and knowledge of, and contacts in, the POS/ECR industry. Consultant
shall not have (nor shall he represent that he has) any power, right or
authority whatsoever to bind Company or Bristol, or to assume, create, or incur
any obligation or liability (express or implied) or otherwise to act in any
manner in the name or on behalf of Company or Bristol, or to make any promise,
warranty or representation binding on Company or Bristol, without the express
written consent of Company or Bristol, as the case may be. This Agreement shall
not be construed to make Consultant an agent of
<PAGE> 2
Company or Bristol for any purpose whatsoever, or to create the relationship of
partners, joint ventures or employer and employee between Company and/or Bristol
and Consultant. Consultant shall be responsible for all costs and expenses
incurred by Consultant in connection with the performance of his obligations
under this Agreement. Company and/or Bristol will not pay or withhold any
federal or state withholding taxes, social security taxes, disability insurance
contributions or any other taxes, deductions or contributions generally made by
employers when paying compensation to employees, nor shall Company or Bristol
incur any worker's compensation liability or other liability due to Consultant's
services.
5. Consultant's Duties. Consultant shall make reasonable efforts to (i)
procure acquisition candidates for Bristol, Company and their affiliates; (ii)
advise Company from time to time with respect to market, sales and service
opportunities for POS systems and ECRs; and (iii) perform such other reasonable
assignments as may be requested by the President of CRI from time to time.
Bristol and Company understand that Consultant is semi-retired, that his
obligations hereunder are part time in nature and that Consultant shall have
satisfied such obligations by making himself reasonably available to Bristol and
Company. In connection with the above duties, Consultant, when requested by
Bristol and/or Company, shall make reasonable efforts to:
* Advise about the technical, operational, marketing and
distribution aspects POS systems and ECRs;
* Advise Company concerning, the economic, commercial and market
conditions and potential customers for POS systems and ECRs; and
* Attend POS/ECR trade shows at the expense of Bristol and/or
Company, * as the case may be.
6. Compensation.
(a) Fees. In full compensation for Consultant's advisory services
rendered hereunder, Company shall pay Consultant a fee of One Hundred Twenty
Thousand Dollars ($120,000) for each year during the term hereof. The above
annual fee shall be payable by Company in arrears in substantially equal
installments on the Company's regular pay days.
(b) Commissions. Consultant shall be entitled to a commission of
one and one-half percent (1.5%) of the purchase price, after adjustments, for
any merger or acquisition effected and closed by Bristol, CRI or any of their
respective subsidiaries of a POS/ECR dealer procured by Consultant; provided,
however, that the commission due Consultant shall be reduced to one percent (1%)
once the aggregate purchase price for all closed mergers or acquisitions
procured by Consultant equals or exceeds One Million Dollars ($1,000,000).
Notwithstanding the above, Consultant shall not be entitled to any commission if
(i) the merger or acquisition in question does not close within twelve (12)
months of the date the dealer is procured by Consultant; or (ii) Bristol,
Company or any of their respective subsidiaries, affiliates, agents or
representatives is the procuring cause of such merger or acquisition, has
previously contacted the dealer in question in connection with a potential
merger or acquisition, or has engaged in negotiations with the dealer in
question prior to the date Consultant presents the potential merger or
acquisition to Bristol and/or Company. Consultant's commissions under this
paragraph 6(b) shall be (i) deemed earned and become payable after all purchase
price adjustments become final (typically sixty (60) days after the closing
date); (ii) paid by Company if Company is the purchaser under such merger or
acquisition; and (iii) paid by Bristol if Bristol or any Bristol affiliate other
than Company is the purchaser under such merger or acquisition. Consultant
acknowledges and expressly agrees that neither Company nor Bristol have any
obligation whatsoever to pursue and/or close any merger or acquisition with a
dealer procured by Consultant, and that such decisions, including the timing
thereof, are to be made by Bristol and/or Company, as the case may be, in their
absolute and sole discretion.
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<PAGE> 3
Bristol and/or Company may deduct from Consultant's fees or commissions (i) any
amounts due Bristol or Company from Consultant for any reason; and (ii) any
deductions required by applicable law.
7. Compliance with Laws. Consultant shall comply with all applicable
existing and future laws, regulations and acts of governments in connection with
the performance of Consultant's obligations under this Agreement and shall not
take any action which would expose Bristol or Company to civil or criminal
liability or forfeiture of tax benefits under such laws.
8. Trademarks. Consultant shall not use or acquire any right in
Bristol's or Company's name or trademark(s) (whether or not registered or filed)
by any means other than by specific written assignments of such rights by
Bristol or Company to Consultant. All rights arising from any use of Bristol's
or Company's name or trademark(s) shall inure to the benefit of Bristol or
Company, as the case may be, and shall be in such a manner so as best to
preserve Bristol's or Company's interest in the same. Consultant is hereby given
a limited right to use stationary and calling cards bearing Company's name, not
as the business name of Consultant, but to reflect Consultant's independent
contractor relationship with Company. Upon the termination of this Agreement,
Consultant agrees immediately to cease use of Company's name on all stationary,
calling cards and any other public representations. Any intentional or willful
activity by or on behalf of Consultant, its agents, or employees, which
materially diminishes in any way the value or goodwill of Bristol's or Company's
name shall entitle Bristol or Company to immediately terminate this Agreement.
9. Confidential Information.
(a) Confidential Information Defined. As used herein,
"Confidential Information" means all proprietary information, trade secrets and
any non-public information, oral and written, and any document or media
containing such information, concerning Bristol or Company or used by Bristol or
Company in the operation of their respective businesses, including, without
limitation, any of Bristol's or Company's actual or prospective customers,
suppliers, contractors and co-venturers or concerning any actual or planned
discoveries, inventions, developments, improvements, technology, know-how,
processes, products, services, businesses, business opportunities, operations,
activities or plans of or belonging to Bristol or Company (including, without
limitation, technical formulae and designs, computer hardware and software,
databases, original works of authorship, customer lists, bills of material,
business plans, financial information, trade secrets and other proprietary
information); provided, however, that Confidential Information shall not include
such portion of the aforesaid information which has become of hereafter becomes
public knowledge within the business equipment industry through no fault of
Consultant.
(b) Confidentiality. Consultant expressly acknowledges and agrees
that prior to and during the term of this Agreement he has and shall become
aware of, Confidential Information, the unauthorized disclosure of which may
harm Bristol and/or Company. Accordingly, Consultant expressly agrees that,
except as expressly authorized by Bristol or Company or as reasonably necessary
in order to fulfill Consultant's duties under this Agreement, both during and
after the term hereof, Consultant shall never communicate, divulge or use for
the benefit of Consultant or any other person or entity, directly or indirectly,
any Confidential Information discovered, conceived of, disclosed, communicated
or in any manner obtained by Consultant or coming into Consultant's possession.
Upon termination of this Agreement for whatever reason or whenever requested by
Bristol or Company, Consultant shall promptly deliver to Bristol or Company, and
shall retain no copies of, all documents, media, records or other materials
containing Confidential Information which are in Consultant's possession or
under Consultant's control.
(c) Affiliates. For purposes of this paragraph 9, the term
"Bristol" and "Company" shall include any parent, subsidiary, affiliated company
or business predecessor to such entities.
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<PAGE> 4
10. Covenant Not to Compete. During the term of this Agreement and for a
period of three (3) years from and after the expiration or earlier termination
of this Agreement, within the states of Kentucky, Ohio, Tennessee, North
Carolina, Virginia, West Virginia, Illinois, Indiana and Missouri (the
"Territory"), Consultant shall not: (i) directly or indirectly enter into the
employ of, or render any service to, or act in concert with, any person,
partnership, corporation or other business entity (other than Bristol, Company
or their affiliates) engaged in any business or in the rendering of any service
of the type being conducted or rendered by Bristol or Company (a "Competitive
Business"); (ii) directly or indirectly engage in any such Competitive Business
on Consultant's own account; or (iii) become interested in any such Competitive
Business, directly or indirectly, as an individual, partner, shareholder,
director, officer, principal, agent, consultant, employee or in any other
relationship or capacity; provided, that the purchase of a publicly traded
security of a corporation, partnership or other entity engaged, or which becomes
engaged, in such business or service shall not in itself be deemed violative of
this paragraph 10 so long as Consultant does not own, directly or indirectly,
more than one percent (1%) of the securities of such corporation, partnership or
other entity. If the final judgment of a court of competent jurisdiction
declares that any term or provision of this paragraph 10 is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to place any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed. Consultant expressly agrees that the running
of the restricted period of competition shall be tolled for any period during
which he is in breach of the covenants set forth in this paragraph 10.
11. Equitable Relief. Consultant expressly agrees that Bristol and/or
Company may not be adequately compensated by damages for a breach by Consultant
of any of the covenants contained in paragraphs 7, 8, 9 and 10, above, and
further agrees that, in the event of a breach or threatened breach by Consultant
of any such provision, Bristol and/or Company shall be entitled to enforce the
covenants contained in such provisions by specific performance and to enjoin or
restrain any such breach or threatened breach (without the necessity of posting
a bond or other security in any action initiated for such relief), but nothing
herein shall be construed as prohibiting Bristol and/or Company from pursuing
any remedy available to Bristol and/or Company for such breach or threatened
breach.
12. Termination.
(a) Bristol and/or Company may terminate this
Agreement for any of the following reasons:
(1) if Consultant commences or has filed against him any
bankruptcy, reorganization, liquidation or insolvency proceeding under any law
for the relief of debtors;
(2) if Consultant breaches any material provision of
paragraphs 7, 8, 9, or 10, above;
(3) if Consultant breaches any other material provision of
this Agreement; or
(4) upon the death of Consultant; and
Notwithstanding anything to the contrary in this Agreement, if there is an event
giving rise to the right to termination under subparagraphs (1), (2) or (3),
above, then Bristol and/or Company shall deliver to Consultant a written notice
which shall
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<PAGE> 5
(i) specifically state the alleged event giving rise to termination
and (ii) provide Consultant with thirty (30) days to cure such event of
termination. If Consultant fails to cure such event of termination within such
thirty (30) day period, then Bristol and/or Company shall deliver to Consultant
a second written notice informing Consultant that the event of termination has
not been cured. Consultant shall then have ten (10) additional days to cure such
event of termination. If Consultant does not cure such event of termination
within such ten (10) day period, then Bristol and/or Company may immediately
terminate this Agreement without further notice. Notwithstanding the above, in
the event of Consultant's death, this Agreement shall terminate immediately and
without notice.
(b) Consultant may terminate this Agreement immediately for any reason
whatsoever.
13. Effect of Termination. Upon any termination of this Agreement:
(a) Consultant shall discontinue and refrain from any conduct or
activity which would give the appearance that he is still an authorized
independent contractor of Bristol and Company and shall comply with all
continuing obligations set forth in this Agreement.
(b) Consultant shall be entitled to fees and commissions earned
prior to the date of termination in accordance with paragraph 6, above.
Consultant shall not be entitled to any damages, compensation or payment with
respect to goodwill, nor to any other compensation under any theory of law,
regardless of the reason for or method of termination.
14. Indemnification by Consultant. Consultant shall indemnify, defend
and hold harmless Bristol and Company, and their respective officers, directors,
employees, agents, attorneys and other representatives, from and against any and
all claims, demands, losses, expenses, costs, damages, liabilities, causes of
action or proceedings, including but not limited to reasonable attorneys' fees
and costs (collectively "Claims"), which arise out of or relate to any willful
act or omission by Consultant, whether in connection with Consultant's
obligations, representations, warranties or covenants under this Agreement or
otherwise. Payment shall not be a condition precedent to recovery under this
indemnity.
15. Indemnification by Company. Company shall indemnify, defend and hold
harmless Consultant from and against any and all Claims, which arise out of or
relate to any act or omission by Company, unless such Claim results from or is
caused by an act or omission of Consultant. Payment shall not be a condition
precedent to recovery under this indemnity.
16. Notice. Any notice to be given under this Agreement shall be in
writing and mailed via certified or registered mail with return receipt
requested, and addressed to the other party at the following address (or at such
other address as such other party shall have given notice to the first party in
accordance with the provisions of this Section):
If to Bristol:
Bristol Technology Systems, Inc.
18201 Von Karman Avenue, Suite 305
Irvine, California 92812
Attn: Richard H. Walker, President
If to Company:
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Cash Registers, Inc.
503 North Main Street
London, Kentucky 40741
Attn: Maurice R. Johnson, President
If to Consultant:
Floyd Shirrell
425 South Creek Drive
Indianapolis, Indiana 46217
or to such other addresses and facsimile numbers as the parties may from time to
time designate in writing.
17. General Provisions
(a) Assignment. Neither this Agreement nor any rights or duties
hereunder may be assigned, transferred or delegated by operation of law or
otherwise, by Consultant, Bristol or Company without the prior written consent
of the other parties hereto; provided, however, that Bristol and/or Company may
at any time and from time-to-time assign their respective rights and/or delegate
their respective duties hereunder to any of their respective affiliates or to
any person or entity acquiring all or substantially all of their respective
businesses or assets.
(b) Entire Agreement. This Agreement and the Merger Agreement
contains the entire agreement of the parties with respect to the subject matter
contained herein and supersedes any prior agreements, understandings,
negotiations, correspondence and other communications. Except as otherwise
provided herein, no addition or modification of any term or provision shall be
effective unless set forth in writing and signed by the parties hereto. There
are no representations, express or implied, upon which any party is relying
which are not set forth in this Agreement.
(c) Headings. Headings at the beginning of each paragraph and
subparagraph are solely for the convenience of the parties and are not part of
this Agreement.
(d) Severability. The invalidity or unenforceability of any
particular provision of this Agreement or part thereof shall not affect the
other provisions, and the remaining provisions of this Agreement (including any
partially unenforceable provision to the extent enforceable) shall be binding
and enforceable and this Agreement shall be construed in all respects as if any
invalid or unenforceable provision were omitted.
(e) Construction. Whenever the context of this Agreement
requires, the singular shall include the plural and the masculine, feminine and
neuter shall include the others. This Agreement shall not be construed as if it
had been prepared by one of the parties, but rather as if both parties had
prepared the same. This Agreement is executed and delivered in the State of
Kentucky and shall be construed and enforced in accordance with, and governed
by, the laws of the State of Kentucky.
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IN WITNESS WHEREOF, the parties have executed this Agreement to
be effective as of the day and year first above written.
"BRISTOL"
BRISTOL TECHNOLOGY SYSTEMS, INC., a Delaware
corporation
-----------------------------------
Gregory S. Lane, Vice President and General
Counsel
"COMPANY"
CASH REGISTERS, INC., a Kentucky corporation
-----------------------------------
Maurice R. Johnson, President
"CONSULTANT"
-----------------------------------
Floyd Shirrell
7
