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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): JULY 29, 1997
LASON, INC.
DELAWARE 0-21407 38-3214743
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
1305 STEPHENSON HIGHWAY
TROY, MICHIGAN 48083
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(Address of Principal (Zip Code)
Executive Offices)
(810) 597-5800
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(Registrant's Telephone Number, Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Lason Systems, Inc. ("Systems"), a wholly-owned subsidiary of Lason,
Inc. (the "Company"), acquired all of the outstanding shares of Common
Stock of Image Conversion Systems, Inc. ("ICS") pursuant to an
Agreement of Purchase and Sale of Stock dated July 17, 1997 which was
consummated on July 29, 1997 (the "Stock Purchase Agreement"), between
and among the Company, Systems, ICS and approximately 35 shareholders
of ICS (such acquisition is referred to herein as the "ICS
Acquisition").
The aggregate consideration paid by the Company as a result of the ICS
Acquisition was determined pursuant to arm's length negotiations and
consisted of 47,441 shares of Common Stock, par value $.01 per share
("Common Stock") of the Company and $18,837,696 in cash. The shares
of Common Stock of certain of the shareholders are being held in
escrow to collateralize the shareholders' indemnification obligations
to Systems under the Stock Purchase Agreement. The escrow agreement
also provides that the shares are subject to forfeiture if ICS does
not achieve certain levels of operating income during the remaining
quarters and year ending 1997 and for the quarters and year ending
1998. The Common Stock issued in the ICS Acquisition is subject to a
24-month lock-up agreement. The Company has agreed to register the
Common Stock subsequent to the lock-up period.
The primary source of the cash portion of the purchase price used in
the ICS Acquisition was Systems' credit facility with a bank group led
by First Union National Bank.
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The description of the foregoing ICS Acquisition is qualified
in its entirety by reference to the copy of the Agreement of Purchase
and Sale of Stock filed as an Exhibit to this Form 8-K.
The Company is not aware of any material relationship that
existed prior to the ICS Acquisition between the Company, its
officers and directors, on the one hand and ICS and its shareholders,
on the other.
The assets of ICS include cash, receivables, inventories,
equipment and other personal property. The Company intends to
continue the utilization of these assets in a manner consistent with
that of their historical usage, namely, providing document
conversion to electronic and other media in eight states.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
To be filed on or prior to October 13, 1997
(b) Pro Forma Financial Information:
To be filed on or prior to October 13, 1997
(c) Exhibits
2.9 Agreement of Purchase and Sale of Stock with respect
to the ICS Acquisition.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated:August 4, 1997 LASON, INC.
By: /s/ William J. Rauwerdink
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William J. Rauwerdink
Its: Executive Vice President
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EXHIBIT INDEX
Exhibit: Description:
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2.9 Agreement of Purchase and Sale of Stock with respect to the
ICS Acquisition.
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EXHIBIT 2.9
AGREEMENT OF PURCHASE AND SALE OF STOCK
THIS AGREEMENT is made and entered into on the 17th day of
July, 1997, between and among LASON SYSTEMS, INC., a Delaware corporation, the
address of which is 1305 Stephenson Highway, Troy, Michigan 48083 ("Buyer");
LASON, INC., a Delaware corporation, the address of which is 1305 Stephenson
Highway, Troy, Michigan 48083 ("Lason, Inc.") for those certain specific
limited purposes hereinafter set forth; John R. Messinger, Michael Riley, J.E.
Hendricks, Daniel P. Bailey, Robert Abbinante, James Athmann, Rick Bissen,
Jeffrey Culmone, Glenn Dedering, Mario Disantis, John Elder, Donald Ferling,
Michael Furmanski, Geoffrey Gitelson, Peter Goodrich, Sheryl Hehn, Thomas
Joyce, Theresa Lester, Michael Polo, Richard Roos, Arun Singh, Peter Szymaszek,
and Timothy Wheeler, each of whose address is 717 W. Algonquin Road, Arlington
Heights, Illinois 60005 (collectively, the "Management Shareholders"), Horizon
Capital Partners I Limited Partnership, a Delaware limited partnership;
("Horizon Capital Partners"), Lanny A. Passaro, John G. Robinson, Albert P.
Degen, M.E. Nevins, Verne R. Read, Charles E. Swanson, AMS-J Trust, John M.
Scott, Jr., as Trustee, George F. Haddix, Robert M. Feerick, Paul A. Stewart
and Paul W. Sweeney, each of whose address is 225 East Mason Street, Suite 600,
Milwaukee, Wisconsin 53202 (collectively, the "Non-Management Shareholders"),
and IMAGE CONVERSION SYSTEMS, INC., a Delaware corporation, the address of
which is 717 W. Algonquin Road, Arlington Heights, Illinois 60005
("Corporation"). The Management Shareholders and the Non-Management
Shareholders are sometimes hereinafter individually referred to as a
"Shareholder" and collectively referred to as "Shareholders." Shareholders and
Corporation are sometimes hereinafter collectively referred to as the "Selling
Parties."
R E C I T A L S:
The Shareholders own, or on the Closing Date shall own, all of
the issued and outstanding capital stock of Corporation as set forth on Exhibit
"A".
Buyer desires to purchase all of the shares in Corporation
owned by the Shareholders so that the aggregate shares (the "Shares") to be
purchased by Buyer will give Buyer one hundred percent (100%) ownership
interest in Corporation. The Shareholders desire to sell the Shares to Buyer,
and Corporation desires that this transaction be consummated.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained in this Agreement, the
parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
SECTION 1.1 SALE AND TRANSFER OF SHARES. Subject to the
terms and conditions set forth in this Agreement, on the Closing Date (as
defined below in Section 7.1), the
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Shareholders will transfer and convey the Shares to Buyer, and Buyer will
acquire the Shares from the Shareholders, free and clear of all liens,
encumbrances, security agreements, equities, options, claims, charges and
restrictions. On the Closing Date, the certificates representing the Shares
are to be duly endorsed in blank for transfer, or accompanied by a separate
written instrument of assignment and are to be accompanied by such other or
further supporting documents as Buyer or its counsel may reasonably require.
SECTION 1.2 PURCHASE PRICE.
The purchase price for the Shares is $20,000,000.00 (the
"Purchase Price"). The Purchase Price will be paid at the Closing (as
hereinafter defined) in cash and in shares of the Common Stock of Buyer's
parent corporation, Lason, Inc. (the "Lason Shares"), as follows:
A. Such amount to discharge those certain liabilities of
Corporation, inclusive of principal and interest, as shall be set
forth on Exhibit "1.2.A." hereto (the "Scheduled Liabilities") but
excluding Corporation's liabilities not set forth on Exhibit "1.2.A.",
all of which will be assumed by the Buyer. The Scheduled Liabilities
shall be discharged at Closing by payment of the respective amounts
set forth on Exhibit "1.2.A." directly by Buyer to the creditors of
Corporation indicated in Exhibit "1.2.A."
B. The balance of the Purchase Price remaining (the "Equity
Payment") will be paid in cash and Lason Shares to the Shareholders
as follows:
1. The Non-Management Shareholders and the group of
Management Shareholders listed on Exhibit "1.2.B.1"
(the "Group") will receive their proportionate
amount of the Equity Payment in cash payable in
collected funds via electronic wire transfer or bank
check, as specified by such Shareholder based
on their percentage ownership of Shares.
2. The Management Shareholders except for the
Group will receive their proportionate amount of
the Equity Payment two-thirds in cash, in collected
funds via electronic wire transfer and one-third in
Lason Shares, based on their percentage ownership of
Shares. The Lason Shares will be valued for this
purpose at the average closing price of Lason Shares
for the preceding 20 trading days prior to the day
preceding the Pre-Closing (as hereafter defined) as
reported in the Wall Street Journal index of NASDAQ
National Market Issues but no less than $19.50 per
share and no more than $24.50 per share
(appropriately adjusted for any stock split, reverse
stock split or common stock dividend effected or
declared by Lason, Inc.). In connection with the
foregoing, on the Closing Date, the Management
Shareholders (except for the Group) will deliver to
Lason, Inc. Lock Up Agreements in mutually
acceptable form (the "Lock-Up Agreements") pursuant
to which Shareholders
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will agree not to sell any of the Lason, Inc. Common
Stock delivered to them in accordance with this
Agreement for a period of 24 months from and after
the Closing Date.
The respective amounts of cash and/or Lason Shares to which each of
the Shareholders is entitled at Closing will be provided in Exhibit
"1.2.B-2.", which shall be completed on or prior to Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
Selling Parties, jointly and severally (but subject to the
limitations on indemnification set forth in Article 9 hereof), represent and
warrant to Buyer that, as of the date hereof:
SECTION 2.1 ORGANIZATION, STANDING AND POWER.
Corporation is duly organized, validly existing and in good standing under the
laws of the State of Delaware, has all necessary corporate power to own its
properties and to carry on its business as now owned and operated by it, is
duly qualified to do intrastate business and is in good standing in each
jurisdiction in which the nature of its business or its properties makes such
qualification necessary and failure to so qualify would have a material adverse
effect on Corporation. Each jurisdiction in which Corporation is so qualified
to do business is listed on Exhibit "2.1".
SECTION 2.2 CAPITALIZATION. The authorized capital stock
of Corporation consists of three hundred thousand (300,000) shares, consisting
of one hundred fifty thousand (150,000) shares of Common Stock, $.01 par value
per share, of which, on the Closing Date, sixty three thousand two hundred
(63,200) shares shall be issued and outstanding; one hundred thousand (100,000)
shares of Series A Convertible Preferred Stock, $.01 par value per share, of
which, on the Closing Date, sixty four thousand seven hundred twenty-six
(64,726) shares shall be issued and outstanding; and fifty thousand (50,000)
shares of Series B Convertible Preferred Stock, $.01 par value per share, of
which, on the Closing Date, thirty three thousand three hundred and
thirty-three (33,333) shares shall be issued and outstanding. All of the
Shares on the Closing Date shall be validly issued, fully paid, nonassessable,
and shall have been so issued in full compliance with all applicable federal
and state securities laws. On the Closing Date there shall be no outstanding
subscriptions, options, rights, warrants, convertible securities or other
agreements or commitments obligating Corporation to issue or to transfer from
treasury any additional shares of its capital stock of any class.
SECTION 2.3 TITLE TO SHARES. On the Closing Date,
Shareholders shall be the owners, beneficially and of record, of all of the
Shares, free and clear of all liens, encumbrances, security agreements,
equities, options, claims, charges and restrictions except as set forth in
Exhibit "2.3".
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SECTION 2.4 SUBSIDIARIES. Except as set forth in Exhibit
"2.4," Corporation does not own, directly or indirectly, any interest or
investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or other entity.
SECTION 2.5 AUTHORITIES AND CONSENTS. The execution,
delivery and performance of this Agreement by Corporation, and the consummation
of the transactions contemplated hereby, have been duly and validly authorized
by the Board of Directors of Corporation. Selling Parties represent and
warrant that they have the right, power, legal capacity and authority to enter
into and perform their respective obligations under this Agreement and that
except pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law (the "HSR Act"), no consent or approval of, notice to or filing
with any governmental authority having jurisdiction over any aspect of the
business or assets of Corporation, and no consent or approval of or notice to
any other person or entity (except consents, approvals and notices required in
connection with contracts and leases listed in Exhibits "2.6", "2.14" and
"2.25"), is required in connection with the execution and delivery by Selling
Parties of this Agreement or the consummation by Selling Parties of the
transactions contemplated hereby.
SECTION 2.6 NO BREACH OR VIOLATION. Except as set forth
in Exhibit "2.6", the execution, delivery and performance of this Agreement by
Corporation, and the consummation of the transactions contemplated hereby, do
not and will not result in or constitute any of the following: (i) a breach of
any term or provision of this Agreement; (ii) a default, breach or violation,
or an event that, with notice or lapse of time or both, would be a default,
breach or violation of any of the terms, conditions or provisions of the
Articles of Incorporation or By-Laws of Corporation; (iii) a default, breach
or violation, or an event that, with notice or lapse of time or both, would be
a default, breach or violation of any of the terms, conditions or provisions of
any lease, license, promissory note, security agreement, commitment, indenture,
mortgage, deed of trust or other agreement, instrument or arrangement to which
Corporation is a party or by which it or its property is bound; (iv) an event
that would permit any party to terminate or rescind any agreement or to
accelerate the maturity of any indebtedness or other obligation of Corporation;
or (v) the creation or imposition of any lien, charge or encumbrance on any of
the properties of Corporation, which, in the case of any matter referred to in
clause (i), (iii), (iv), or (v) above, would have a material adverse effect on
Corporation or its condition (financial or otherwise), earnings, assets,
liabilities, business, operations or, to the knowledge of Selling Parties,
prospects, or the transactions contemplated hereby.
SECTION 2.7 FINANCIAL STATEMENTS. There have heretofore
been delivered to Buyer: (i) an unaudited balance sheet, statement of income
and retained earnings and changes in financial position as of and for the six
months ended April 30, 1997 prepared internally by Corporation and certified as
being true and correct in all material respects; and (ii) an unaudited balance
sheet, statement of income and retained earnings and changes in financial
position as of and for the month ended May 31, 1997 prepared internally by
Corporation and certified as being true and correct in all material respects.
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Prior to the Closing, Corporation shall deliver to Buyer a
financial statement, including balance sheet, statement of income and retained
earnings, and statement of changes in financial position of Corporation as of
and for the fiscal year ended October 31, 1996, audited by Arthur Andersen,
LLP, certified public accountants, whose opinion with respect to said financial
statement is included therein (the "1996 Audited Financial Statement").
All of the financial statements referred to above (the
"Financial Statements") have been or, as applicable, will be prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except that the unaudited financial statements
contain no footnotes and the interim financial statements are subject to
customary year-end audit adjustments.
The Financial Statements present or, as applicable, when
delivered will present fairly, in all material respects, the financial
positions of Corporation to which they relate as at the respective dates
thereof, and the related results of operations of Corporation for the periods
therein referred to.
SECTION 2.8 BOOKS AND RECORDS. The certificates contained
in the stock record books of Corporation are complete and correct. The other
books of account and other records (other than minute books) of Corporation are
complete and correct in all material respects and all such records have been
maintained in accordance with sound business practices in Shareholders'
reasonable judgment. Except for omissions which would not result in a material
adverse effect on Corporation, the minute books of Corporation contain
materially accurate and complete records of all meetings held, and corporate
action taken by, the Shareholders, the Board of Directors, and committees of
the Board of Directors of Corporation, and no meeting of any such Shareholders,
Board of Directors, or committee has been held for which minutes have not been
prepared and are not contained in such minute books.
SECTION 2.9 UNDISCLOSED LIABILITIES. Except as set forth
in Exhibit "2.9," Corporation has no material debts, liabilities or
obligations of any kind, whether accrued, absolute, contingent or otherwise,
which, under generally accepted accounting principles, should have been so
reflected or reserved against or disclosed in Corporation's balance sheet dated
as of May 31, 1997, included in the Financial Statements and were not so
included, except for those that may have been incurred subsequent to the date
of that balance sheet. Except as set forth in Exhibit "2.9," all material
debts, liabilities and obligations incurred after May 31, 1997, were incurred
in the ordinary course of business and are usual and normal in amount both
individually and in the aggregate.
SECTION 2.10 ABSENCE OF CERTAIN CHANGES. Except as set
forth in Exhibit "2.10," since January 1, 1997, the business of Corporation
has been operated only in the ordinary course and, without limiting the
generality of the foregoing, Corporation has not:
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A. Declared, set aside or paid any dividend or other
distribution in respect of its capital stock or otherwise (including
bonus distributions to Shareholders) or redeemed, purchased or
otherwise acquired, directly or indirectly, any of its capital stock;
B. Sustained any damage, destruction or loss, by reason of
fire, explosion, earthquake, casualty, labor trouble, requisition or
taking of property by any government or agency thereof, windstorm,
embargo, riot, act of God or public enemy, flood, accident, revocation
of license or right to do business, total or partial termination,
suspension, default or modification of contracts, governmental
restriction or regulation, other calamity or other similar or
dissimilar event (whether or not covered by insurance), materially and
adversely affecting its condition (financial or otherwise), earnings,
business, assets, liabilities, properties, operations or, to the
knowledge of the Selling Parties, prospects;
C. Had any material adverse change in its condition
(financial or otherwise), earnings, business, assets, properties,
liabilities, operations or, to the knowledge of the Selling Parties,
prospects;
D. Issued, authorized for issuance, or sold any equity
security, bond, note or other security, or granted, or entered into,
any commitment or obligation to issue or sell any such equity
security, bond, note or other security, whether pursuant to offers,
stock option agreements, stock bonus agreements, stock purchase plans,
incentive compensation plans, warrants, calls, conversion rights or
otherwise;
E. Incurred additional debt for borrowed money, or
incurred any material obligation or liability (fixed, contingent or
otherwise) except in the ordinary and usual course of its business;
F. Paid any material obligation or liability (fixed,
contingent or otherwise), or discharged or satisfied any material lien
or encumbrance, or settled any material liability, claim, dispute,
proceeding, suit or appeal, pending or threatened against it or any of
its assets or properties, except in the ordinary and usual course of
its business;
G. Mortgaged, pledged, otherwise encumbered or subjected to
lien any of its assets or properties, tangible or intangible, except
for liens for current taxes which are not yet due and payable,
purchase-money liens arising out of the purchase or sale of products
or services made in the ordinary and usual course of its business and
liens existing on January 1, 1997;
H. Sold, transferred, leased, licensed or otherwise
disposed of any material asset or property, tangible or intangible,
except in the ordinary and usual course of its business, or
discontinued any product line or the manufacture, sale or other
disposition of any of its products or services;
I. Purchased or otherwise acquired any debt or equity
securities of any corporation, partnership, joint venture, firm or
other entity;
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J. Made any expenditure for the purchase, acquisition,
construction or improvement of a material capital asset, except in the
ordinary and usual course of its business;
K. Entered into any transaction or contract, or made any
commitment to do the same, except in the ordinary and usual course of
business and not involving an amount in any case in excess of
$25,000.00;
L. Waived any right or claim or canceled any material debts
or claims or voluntarily suffered any extraordinary losses;
M. Sold, assigned, transferred or conveyed any material
property rights, except in the ordinary and usual course of business;
N. Effected any material amendment or supplement to any
employee profit sharing, stock option, stock purchase, pension, bonus,
incentive, retirement, medical reimbursement, life insurance deferred
compensation or any other employee benefit plan or arrangement;
O. Paid to or for the benefit of any of its directors,
officers, employees or Shareholders any compensation of any kind other
than as previously in effect prior to December 31, 1996, other than
scheduled increases or increases in the ordinary course of business
consistent with past practice;
P. Effected any change in its directors or executive
management;
Q. Effected any amendment or modification in its Articles of
Incorporation or By-Laws;
R. Had any labor trouble that has or might materially and
adversely affect its condition (financial or otherwise), earnings,
business, assets, liabilities, properties, operations, or, to the
knowledge of the Selling Parties, prospects;
S. Changed its accounting methods or practices (including,
without limitation, any change in depreciation or amortization
policies or rates);
T. Revalued any of its assets except for any receivables of
Corporation written off prior to the Closing Date with the prior
approval of Lason's Chief Financial Officer.;
U. Increased the salary or other compensation payable or to
become payable to any of its officers, directors or employees, or
declared, paid or committed to pay a bonus or other additional salary
or compensation to any such person, other than scheduled increases or
increases in the ordinary course of business consistent with past
practice;
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V. Made any loan to any person or entity, or guaranteed any
loan;
W. Had any other event or condition of any character that
has or would reasonably be expected to have a material and adverse
effect on its condition (financial or otherwise), earnings, business,
assets, liabilities, properties, operations or, to the knowledge of
Selling Parties, prospects; or
X. Agreed, committed or entered into any other
understanding to do any of the things described in the preceding
Subsections A through W.
SECTION 2.11 TAXES. Except as set forth in Exhibit
"2.11", within the times and in the manner prescribed by law, Corporation has
filed all tax returns required to be filed and has paid or made adequate
provision for payment of all taxes upon it, its properties, income or
franchises, due and payable on or before the date hereof. Except as set forth
in Exhibit "2.11," there are no claims pending against Corporation for past-due
taxes, nor has Corporation been notified of any claims. Except as set forth in
Exhibit "2.11," there are no present disputes or discussions with federal,
state, local, foreign, commonwealth or other authorities with respect to any
taxes of any nature payable by Corporation. Except as set forth in Exhibit
"2.11", there are no outstanding waivers or agreements by Corporation for the
extension of the time for the assessment of any tax. Except as set forth in
Exhibit "2.11," the tax returns of Corporation, if audited, have been finally
determined by the Internal Revenue Service or other taxing authority, or
otherwise closed, and any penalties, deficiencies, assessments, additions to
tax and interest proposed as a result of such audits have been paid or settled.
The charges, accruals and reserves for taxes reflected in the Financial
Statements, are adequate for any and all taxes for the periods covered by such
Financial Statements, and for all prior periods, whether or not disputed. As
used in this Section 2.11, the terms "tax" and "taxes" refer to any tax,
assessment, additions to tax, fee, penalty, interest or other governmental
charge imposed by any federal, state, county, local, foreign, commonwealth or
other governmental entity. Corporation has never filed, nor will it file, any
consent under Section 341(f) of the Internal Revenue Code of 1986, as amended,
on or before the Closing Date.
SECTION 2.12 RECEIVABLES. Except as set forth in Exhibit
"2.12," and except for receivables of Corporation written off prior to the
Closing Date with the prior approval of Lason's Chief Financial Officer, all
receivables of Corporation shown on the balance sheets included in the
Financial Statements are carried at values determined in accordance with
generally accepted accounting principles consistently applied, reflect all
pertinent facts known to Corporation as of the date hereof, and represent valid
and binding obligations of the debtors requiring no further performance by
Corporation and are collectible in full without any set-off whatsoever within
180 days of the date on which such receivable was created. Except as set forth
in Exhibit "2.12," reserves for doubtful accounts have been established on the
books of Corporation in accordance with generally accepted accounting
principles consistently applied and are reflected on the balance sheets
included in the Financial Statements.
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SECTION 2.13 INVESTMENTS AND INVESTMENT SECURITIES.
Corporation has no interest, of record or beneficial, direct or indirect, in
any governmental bonds or notes, other investment securities and assets held
for investment except as set forth in Exhibit "2.13."
SECTION 2.14 REAL PROPERTY.
A. Exhibit "2.14" sets forth a complete and accurate
address of each parcel of real property, together with all buildings,
fixtures and other improvements located thereon (collectively, the
"Real Property") which is owned by or leased to Corporation.
B. To the best of Selling Parties' knowledge, the Real
Property and the current and currently planned use thereof is and will
be in compliance in all material respects with all applicable use
restrictions and/or lease covenants.
C. No notice of violation of any applicable federal, state
or local statute, law, ordinance, rule, regulation, order or
requirement, or of any covenant, condition, restriction or easement
affecting the Real Property or with respect to the use or occupancy of
the Real Property, has been given to Corporation by any governmental
authority having jurisdiction over the Real Property or by any other
person entitled to enforce the same.
D. To the best of Selling Parties' knowledge, there is not:
(i) any intended public improvement which may involve any charge being
levied or assessed or which may result in the creation of any lien
upon the Real Property; (ii) any intended or proposed federal, state
or local statue, ordinance, order, requirement, law or regulation
(including, but not limited to, zoning changes) which may adversely
affect the current or planned use of the Real Property; or (iii) any
suit, action, claim or legal, administrative, arbitration or other
proceeding or governmental investigation pending or threatened or
contemplated against or affecting the Real Property nor is there any
basis for any such matters.
E. Corporation has not subjected, and will not subject or
suffer to be subjected hereafter, the Real Property or any portion
thereof to any lease (except a lease by Corporation), sublease,
tenancy, concession, license, occupancy agreement or similar right,
mortgage, deed of trust, lien, encumbrance, claim, charge, equity,
covenant, condition, restriction, easement, right of way or other
matter affecting the Real Property or any portion thereof except as
set forth in Exhibit "2.14" or except for any lien, encumbrance,
covenant, condition, restriction, easement, right of way or other
matter that does not interfere in any material respect with the use of
the Real Property in the conduct of Corporation's business.
F. Except as set forth in Exhibit "2.14," there are no
unpaid taxes, assessments (special, general or otherwise) or bonds of
any nature affecting the Real Property or any portion thereof due and
payable by Corporation.
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SECTION 2.15 LEASES. Exhibit "2.15" lists all leases,
rental agreements, conditional sales contracts and other similar agreements
(collectively, "Leases"), as amended, which involve payment by it in the future
of more than $25,000.00, under which Corporation holds or uses any real or
personal property or leases any of the same to others. Corporation has
complied with the material provisions of all Leases in all material respects,
and all such Leases are valid, in good standing and enforceable by Corporation
in accordance with their terms, except as limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally and by
limitations on enforceability applicable to contracts generally.
Notwithstanding anything contained in the Leases, Corporation has such title to
or interests thereunder as are necessary to continue to conduct its business as
presently conducted or as presently proposed to be conducted, and Selling
Parties know of no title defect to which any of the Leases is subject which
might be expected at any time to have a material adverse effect on Corporation
or its condition (financial or other), earnings, assets, liabilities, business,
operations or, to the knowledge of Selling Parties, prospects. Exhibit "2.15"
sets out any and all advances, deposits and prepayments made by Corporation
under the Leases.
SECTION 2.16 ENVIRONMENTAL MATTERS.
A. None of the operations or property of Corporation is or
has been subject to any judicial or administrative proceeding, order,
judgment, decree or settlement alleging or addressing a violation of
or liability under any requirements of law derived from or relating to
all federal, state and local laws relating to or addressing the
environment, health or safety (including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section Section 9601 et seq., Occupational Safety and
Health Act, 29 U.S.C. Section Section 651 et seq., Resource
Conservation and Recovery Act, 42 U.S.C. Section Section 6901 et
seq., Clean Air Act, 42 U.S.C. Section Section 7401 et seq., Federal
Water Pollution Control Act, 33 U.S.C. Section Section 1251 et seq.,
and any similar federal or state acts or statutes now in effect),
which requirements are sometimes herein collectively referred to as
the "Environmental Laws".
B. Corporation has no knowledge of a "Release" nor has it
filed any notice under any applicable Environmental Laws reporting
such "Release" (defined as any spill, emission, leaking, deposit,
discharge, dispersal or other release) into the indoor or outdoor
environment or into or out of any of the Real Property (including
movement in or through the air, soil, surface water, groundwater or
property) of a "Contaminant" (defined as any hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, asbestos, polychlorinated
biphenyls, or any constituent of any of the foregoing, including such
items as are defined under any federal, state or local law or
regulation), or indicating past or present treatment, storage (other
than for less than ninety (90) days) or disposal of a "hazardous
waste" (as that term is defined under 40 Code of Federal Regulations
("CFR") Part 261 or any state equivalent) or reporting a material
violation of any applicable Environmental Laws.
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C. Corporation has not received any written notice, claim or
report from any governmental authority or third party to the effect
that Corporation is or may be liable to any other person or entity as
a result of the Release or threatened Release of a Contaminant into
the environment.
SECTION 2.17 PROPRIETARY RIGHTS. Exhibit "2.17" contains
a list and brief description of all material trade names, trademarks, trademark
registrations and applications for registration, service marks, patent rights,
patent applications, trade secrets, copyrights and applications therefor
(herein collectively referred to as "Proprietary Rights") owned by Corporation,
useful or necessary to the conduct of its business, or in which Corporation has
any rights, licenses or immunities and of all patent licensing and similar
arrangements to which Corporation is a party. All Proprietary Rights are owned
by Corporation, and are valid and in full force and effect, or are licensed to
Corporation pursuant to license agreements which are valid and binding
agreements of the respective licensors.
SECTION 2.18 NON-INFRINGEMENT; AGREEMENTS. Except as set
forth in Exhibit "2.18," no Proprietary Right is the subject of litigation or
other adversary proceedings. To the best of Selling Parties' knowledge, no
present or presently proposed operation or activity of Corporation infringes
the rights of any other person or entity, and no person or entity is infringing
the Proprietary Rights of Corporation. Corporation has the right and
authority, including without limitation, adequate licenses, to use such
Proprietary Rights as are necessary to enable Corporation to conduct and
continue to conduct all phases of its business in the manner presently
conducted by it. Except as set forth in Exhibit "2.18", Corporation is not a
party to or bound by any license or agreement requiring the payment by it of
any royalty, override or similar payment in connection with any activity
conducted or to be conducted by it. Except as provided for by the terms of
contracts with governmental authorities, or as otherwise set forth in Exhibit
"2.18", Corporation is not a party to any agreement: (i) prohibiting or
restricting its use or sale of any special device, item, customer list, secret
process or the like; or (ii) limiting its business to any territory, pricing
policy or customers; or (iii) requiring exclusive dealing or otherwise in
restraint of its business.
SECTION 2.19 INSURANCE. All policies of liability, theft,
life, fire, title and other forms of insurance and surety bonds (including,
without limitation, any standby letters of credit), insuring Corporation, its
directors, officers, employees, properties, assets and business are listed and
briefly described on Exhibit "2.19." All of said policies are valid and in
good standing. Corporation has experienced no losses or made claims under any
of such policies in an amount in excess of $25,000.00 except as are set forth
on Exhibit "2.19."
SECTION 2.20 INTERESTED TRANSACTIONS. Corporation has no
contract or agreement (oral or written) with, any outstanding loans to or from,
or any outstanding liabilities (except for no more than one (1) months' salary
at no more than the current annual rate) to any officer, director, employee or
stockholder of Corporation or any relative of any such person or any
corporation or other entity in which any of such persons has a material
financial interest, direct
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or indirect, or of which any such person is an officer, director or partner,
except as set forth in Exhibit "2.20."
SECTION 2.21 CUSTOMERS AND SALES. A correct and current
list of all customers of Corporation whose annual purchases are reasonably
expected to exceed $25,000.00 for the 1997 fiscal year of the Corporation is
set forth on Exhibit "2.21." Selling Parties have no knowledge of any
communications, oral or written, to Corporation from any customer who has
ordered products or services from Corporation which have not yet been delivered
or performed of such customer's intent to cancel such order. Selling Parties
have no knowledge of any communication, oral or written, from any customer of
Corporation listed on Exhibit "2.21" that such customer intends to cease doing
business with Corporation or to materially decrease the amount of the business
it presently is doing with Corporation. Buyer acknowledges that a majority of
Corporation's sales occur on a purchase order-by-purchase order basis and not
pursuant to long-term contracts with customers, and, that, as to any customer,
sales may vary significantly from year to year. Accordingly, Selling Parties
disclaim any representation or warranty as to future sales levels with respect
to any customer.
SECTION 2.22 EXISTING EMPLOYMENT CONTRACTS AND/OR
REMUNERATION AGREEMENTS. Exhibit "2.22" sets forth a complete and accurate
list of all employment contracts or other agreements or arrangements providing
for employee remuneration or benefits to which Corporation is a party or by
which Corporation is bound, copies of the originals of which have been provided
to Buyer. All such contracts and arrangements are in full force and effect,
and neither Corporation nor to the best of Selling Parties' knowledge any other
party is in default in any material respect under any such contract or
arrangement, nor are there any amendments, modifications, changes or releases
thereto, written or oral. There have been no claims of defaults and there are
no facts or conditions known to Selling Parties which if continued, or upon
notice, will result in a material default under such contracts or arrangements.
There is no pending or threatened labor dispute, strike or work stoppage
affecting the business of Corporation.
SECTION 2.23 EMPLOYEE BENEFITS PLANS. Exhibit "2.23" sets
forth a complete and accurate list of all collective bargaining agreements and
all pension, bonus, profit-sharing, stock option or other plan or arrangement
providing for employee benefits (including any plan within the meaning of
Section 3(3) of the Employment Retirement Income Security Act), to which
Corporation is a party or by which Corporation is bound, copies of the
originals of which have been previously delivered to Buyer. There are no
unfunded liabilities of Corporation with respect to any such collective
bargaining agreements, or pensions, bonus, profit-sharing, stock option or
other plans or arrangements providing for employee benefits except as set forth
on Exhibit "2.23" hereto.
SECTION 2.24 WORKERS COMPENSATION; EMPLOYMENT
DISCRIMINATION; LABOR RELATIONS. Corporation has complied in all material
respects with all applicable federal, state and local laws, rules, regulations
and executive orders relating to employment, all applicable laws, rules and
regulations governing payment of minimum wages and overtime rates, and the
withholding and payment of taxes from compensation of employees and the payment
of premiums
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and benefits under applicable worker compensation laws. There are no
employment discrimination proceedings by any employee or former employees
against Corporation currently pending or, to the knowledge of the Selling
Parties, threatened, before any state or federal court or state or federal
administrative agency, tribunal, commission or board and, to the best of
Selling Parties' knowledge, no facts or circumstances exist which may result in
the filing or commencement of any such proceeding. All currently pending or
outstanding worker's compensation claims against Corporation are listed on
Exhibit "2.24" attached hereto and all such claims are fully insured against.
There is no effort being made to organize the employees of Corporation into any
collective bargaining unit or to solicit them to join any labor organization
and Corporation has no knowledge of any intention on the part of any labor
organization to organize such employees or to solicit them to join any labor
organization. Corporation is not bound by any prior court, administrative
agency, tribunal, commission or board, decree, judgment, decision, arbitration
agreement or settlement relating to collective bargaining agreements,
conditions of employment or, to the best of Selling Parties' knowledge,
attempts to organize a collective bargaining unit which may adversely affect
the business and affairs of Corporation or the transactions contemplated
hereby. Except as set forth on Exhibit "2.24," there is no unfair labor
practice complaint against Corporation pending before the National Labor
Relations Board.
SECTION 2.25 OTHER CONTRACTS. Exhibit "2.25" lists and
briefly describes all contracts, agreements, commitments, guarantees, letters
of intent, understandings or other arrangements of a contractual nature,
written or oral (including, but not limited to, franchise, patent, trademark
and royalty agreements), other than outstanding purchase orders made in the
ordinary course of business and other than as listed in any other schedule
hereto, to which Corporation is a party and which: (i) involve payment by
Corporation of more than $25,000.00 ; or (ii) materially affect the condition
(financial or other), earnings, assets, liabilities, business, operations or,
to the knowledge of the Selling Parties, prospects of Corporation. Corporation
has, to the best of Selling Parties' knowledge, complied in all material
respects with the provisions of all contracts, agreements, commitments,
guarantees, letters of intent, understandings, and other arrangements listed on
Exhibit "2.25," and has not been in material default or claimed default under
any thereof.
SECTION 2.26 OFFICERS AND DIRECTORS, ETC. Exhibit "2.26"
is a true and complete list of:
A. The names of all present executive officers and
directors of Corporation, their current annual salaries or other
compensation (such as, but not limited to, consultants' fees) and
including all bonuses, whether deferred, accrued or otherwise, which
were paid or accrued during 1996, and all employment and consultant
agreements (copies of which are hereby provided);
B. The names, titles and annual compensation of all salaried
employees of Corporation whose compensation (in whatever form) from
Corporation as of the date hereof will equal or exceed or which will
be likely to exceed an annual rate of
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$50,000.00, in 1997 or equaled or exceeded such amount in the year
ended December 31, 1996.
C. The name of each bank or other financial institution in
which Corporation has an account, deposit or safe deposit box, the
account or other identification numbers with respect to such accounts,
deposits on safe deposit boxes, and the names of all persons
authorized to draw thereon or who have access thereto;
D. The names of all persons holding tax or other powers of
attorney from Corporation and a summary of the terms of each; and
E. The names of all persons authorized (by the By-Laws or by
resolution of the Board of Directors or otherwise) to write checks or
borrow funds on behalf of Corporation.
SECTION 2.27 LITIGATION AND CLAIMS. Except as set forth
on Exhibit "2.27," there is: (i) no action, suit, proceeding, claim or
investigation pending or, to the best of Selling Parties' knowledge,
threatened, in any court or before any arbitrator or before or by any federal,
state or other governmental department, commission, bureau, agency or
instrumentality, domestic or foreign; and (ii) to the knowledge of the Selling
Parties, no other unresolved claim made against Corporation or affecting it or
its properties or business, or the transactions contemplated by this Agreement
or any factual or legal basis for any such action, suit, proceeding, claim or
investigation which would materially affect any of the same. All
correspondence, memoranda and other written notifications (collectively,
"Complaints") which it has received within the twelve (12) months preceding the
date hereof concerning, or relating to, complaints or expressions of
dissatisfaction with the products, services or personnel of Corporation, which
Complaints, either individually, or in the aggregate, would reasonably be
expected to result in a material adverse change to the condition (financial or
other), earnings, business, assets, operations or, to the knowledge of Selling
Parties, or prospects of Corporation are listed on Exhibit "2.27" and Buyer has
been provided with accurate and complete copies of same. Except as set forth
on Exhibit "2.27," Corporation is not presently engaged in any legal action to
recover monies due to it or damages sustained by it.
SECTION 2.28 GENERAL LIABILITY. Selling Parties have no
knowledge of any statement of facts or the occurrence of any event forming the
basis for any present material tort claim against Corporation not covered by
insurance.
SECTION 2.29 OTHER TANGIBLE PERSONAL PROPERTY. Exhibit
"2.29" contains a complete and accurate list and brief description of each item
of machinery, tools, dies, appliances, vehicles, furniture, equipment
(including essential replacement parts) and other tangible personal property of
any kind and description, other than inventories, owned or leased by
Corporation which individually (as to each item) has a book value in excess of
$25,000.00 (the "Tangible Personal Property"). All motor vehicles listed on
Exhibit "2.29" have passed emission standards examinations required by
applicable law. Except as stated in Exhibit "2.29," no Tangible
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Personal Property used by Corporation in connection with its business is held
under any lease, security agreement, conditional sales contract or other title
retention or security arrangement, or is located other than in the possession
of Corporation.
SECTION 2.30 TITLE TO ASSETS. Except for property leased
by Corporation, Corporation has good and marketable title to all its assets and
interests in assets, whether real, personal, mixed, tangible and intangible,
which constitute all the assets and interests in assets that are used in its
business. All these assets are free and clear of mortgages, liens, pledges,
charges, encumbrances, equities, claims, easements, rights of way, covenants,
conditions or restrictions, except for: (i) those disclosed in Corporation's
most recent balance sheet included in the Financial Statements; (ii) the lien
of current taxes not yet due and payable; (iii) possible minor matters that, in
the aggregate, are not substantial in amount and do not materially detract from
or interfere with the present or intended use of any of these assets, nor
materially impair business operations; and (iv) those liens set forth on
Exhibit "2.30." Except as set forth in Exhibit "2.30," to the knowledge of the
Selling Parties, all real property and tangible personal property of
Corporation is in good operating condition and repair, ordinary wear and tear
excepted. Corporation is in possession of all premises leased to it from
others. Except as set forth in Exhibit "2.30", no officer, nor any director or
employee of Corporation, nor any spouse, child or relative of any of these
persons, owns or has any interest, directly or indirectly, in any of the real
or personal property owned by or leased to or any copyrights, patents,
trademarks, trade names or trade secrets licensed by Corporation.
SECTION 2.31 INVESTMENT REPRESENTATIONS. In connection
with the acquisition of Lason, Inc. Common Stock by the Management Shareholders
(except for the Group)::
A. Management Shareholders (except for the Group) were
given the Annual Report on Form 10-K of Lason, Inc. for the fiscal
year ended December 31, 1996 (Form 10-K), the quarterly report on Form
10-Q of Lason, Inc. for the quarter ending March 31, 1997 ("Form
10-Q") filed with the Securities and Exchange Commission (the "SEC"),
and the opportunity to ask questions and receive answers concerning
Lason, Inc. and the terms and conditions of the offer and sale and to
obtain any additional information possessed by Lason, Inc. or which
Lason, Inc. could acquire without unreasonable effort or expense
necessary to verify the accuracy of the information provided to
Management Shareholders about Lason, Inc.;
B. Management Shareholders (except for the Group) are
acquiring Lason, Inc. Common Stock solely for their own account for
investment and not with the view to sale or distribution of the Lason,
Inc. Common Stock acquired hereunder or any portion thereof and not
with any present intention of selling, offering to sell, or otherwise
disposing of or distributing the Lason, Inc. Common Stock acquired
hereunder or any portion thereof;
C. Management Shareholders (except for the Group) have
received all information they deemed necessary and appropriate to
enable them to evaluate the financial risk inherent in making an
investment in the Lason, Inc. Common Stock;
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D. Management Shareholders (except for the Group) are
accredited investors as such term is defined in Regulation D, Rule 501
under the Securities Act of 1933, as amended (the "Act"), or are
sophisticated in financial matters and able to evaluate the risk and
benefits of an investment in Lason, Inc.;
E. Management Shareholders (except for the Group) are aware
that the Lason, Inc. Common Stock which will be delivered to them has
not been registered under the Act, and, therefore, cannot be resold
unless such stock is registered under the Act or unless an exemption
from registration under the Act is available (such as that provided by
Rule 144 under the Act) and that each certificate of Lason, Inc.
Common Stock will contain a legend noting the restrictions on resale
under the Act and under the Lock-Up Agreements; and
F. Management Shareholders (except for the Group) will not
sell, assign or transfer any of the shares of the Lason, Inc. Common
Stock received pursuant to this Agreement except following expiration
of the restrictions imposed by the Lock-Up Agreement and except (i)
pursuant to an effective registration statement under the Act; or
(ii) in a transaction which, in the opinion of counsel reasonably
satisfactory to Buyer is not required to be registered under the Act.
Notwithstanding the above, the foregoing restrictions on transfer
shall not apply to any transfer by Management Shareholder to
Management Shareholder's spouse and/or descendants or any trust
primarily for the benefit of Management Shareholder and/or Management
Shareholder's spouse and or descendants, provided that the transferee
agrees to the foregoing restrictions on resale and to the inclusion of
a legend on the certificate to be issued to transferee noting the
restrictions on resale under the Act and under the Lock-Up Agreement.
SECTION 2.32 BEST KNOWLEDGE. The term "to the best of
Selling Parties' knowledge," or equivalent terms, as used to qualify any of the
foregoing representations and warranties, means actual knowledge of
Shareholders.
SECTION 2.33 ACCURACY AND COMPLETENESS OF REPRESENTATIONS
AND WARRANTIES. No representation or warranty made by Selling Parties in this
Agreement and no statement contained in any document or instrument delivered or
to be delivered to Buyer pursuant hereto or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a known
material fact, or omits or will omit to state a known material fact necessary
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading..
SECTION 2.34 EXCLUSION OF IMPLIED WARRANTIES. SELLING
PARTIES EXCLUDE AND DISCLAIM ANY AND ALL IMPLIED WARRANTIES WITH RESPECT TO
THE SHARES AND EACH OF THEM. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
SELLING PARTIES MAKE NO WARRANTIES TO BUYER IN CONNECTION WITH THE SALE AND
TRANSFER OF THE SHARES TO BUYER OR THE CONDITION OR PROSPECTS OF CORPORATION OR
ITS BUSINESS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS ARTICLE 2.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF BUYER AND LASON, INC.
Buyer with respect to Buyer and Lason, Inc. with respect to
Lason, Inc. hereby represent and warrant to Selling Parties as follows:
SECTION 3.1 ORGANIZATION. Buyer and Lason, Inc. are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware, and have the corporate power and are duly
authorized to carry on their businesses where and as now conducted and to own,
lease and operate properties as they now do.
SECTION 3.2 AUTHORITIES AND CONSENTS. The execution,
delivery and performance of this Agreement by Buyer and Lason, Inc., and the
Guaranty attached hereto by Lason, Inc. and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by the Board of Directors of each. Buyer and Lason, Inc. represent
and warrant that they have the right, power, legal capacity and authority to
enter into and perform their respective obligations under this Agreement (and
with respect to Lason, Inc., the Guaranty) and that except pursuant to the HSR
Act, no consent or approval of, notice to or filing with any governmental
authority having jurisdiction over any aspect of the business or assets of
Buyer and Lason, Inc., and no consent or approval of or notice to any other
person or entity is required in connection with the execution and delivery by
Buyer and Lason, Inc. of this Agreement or the Guaranty or the consummation by
Buyer and Lason, Inc. of the transactions contemplated hereby or thereby.
SECTION 3.3 NO BREACH OR VIOLATION. The execution,
delivery and performance of this Agreement by Buyer and Lason, Inc., and the
Guaranty of Lason, Inc. and the consummation of the transactions contemplated
hereby and thereby, do not and will not result in or constitute any of the
following: (i) a breach of any term or provision of this Agreement and of the
Guaranty by Lason, Inc.; (ii) a default, breach or violation, or an event that,
with notice or lapse of time or both, would be a default, breach or violation
of any of the terms, conditions or provisions of the Articles of Incorporation
or By-Laws of Buyer and Lason, Inc.; (iii) a default, breach or violation, or
an event that, with notice or lapse of time or both, would be a default, breach
or violation of any of the terms, conditions or provisions of, or any lease,
license, promissory note, security agreement, commitment, indenture, mortgage,
deed of trust or other agreement, instrument or arrangement to which Buyer and
Lason, Inc. is a party or by which it or its property is bound; (iv) an event
that would permit any party to terminate or rescind any agreement or to
accelerate the maturity of any indebtedness or other obligation of Buyer and
Lason, Inc.; or (v) the creation or imposition of any lien, charge or
encumbrance on any of the properties of Buyer and Lason, Inc.
SECTION 3.4 NO BREACH. Buyer and Lason, Inc. know of no
facts or circumstances that may tend to cause, or relate to, an existing or
potential breach or default by Selling Parties of the material terms,
conditions, representations and warranties set forth herein.
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SECTION 3.5 VALIDLY ISSUED. The total authorized number
of shares of capital stock which Lason, Inc. has authority to issue is
20,000,000 shares of Common Stock, par value $0.01 per share, of which as of
March 31, 1997, 8,864,192 shares are issued and outstanding, and 5,000,000
shares of preferred stock, par value $0.01 per share, of which as of March 31,
1997, no shares are issued and outstanding. Additionally, as of March 31, 1997,
certain persons hold options to acquire approximately 698,520 shares of Lason,
Inc. Common Stock. When issued in accordance with the terms of this Agreement,
the Common Stock of Lason, Inc. being issued to Shareholder will be validly
issued, fully paid and non-assessable.
SECTION 3.6 TRADING ON THE NASDAQ NATIONAL MARKET. The
shares of Common Stock of Lason, Inc. are currently registered for trading on
the NASDAQ National Market under the symbol "LSON." As soon as practicable,
and in any event within 60 days following the Closing Date, Lason, Inc. will
prepare and file the applicable application with respect to the Lason Shares
with the NASDAQ National Market.
SECTION 3.7 LASON, INC. FORM 10-K AND FORM 10-Q. The
Form 10-K and the Form 10-Q do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading. There have been no material adverse changes in the condition
(financial or otherwise), earnings, business, assets, liabilities, properties,
or operations or prospects of Buyer or Lason, Inc. since March 31, 1997.
ARTICLE 4
FURTHER AGREEMENTS OF THE PARTIES
SECTION 4.1 ACCESS TO INFORMATION. Buyer and its
representatives may make such investigation of the properties, assets and
business of Corporation as Buyer may reasonably request, and Corporation shall
give to Buyer and to its counsel, accountants and other representatives, full
access during normal business hours to all of the properties, books, contracts,
commitments, records and files of Corporation, and shall furnish to Buyer all
such documents and copies of documents (certified as true and complete if
requested) and such information concerning the business and affairs of
Corporation as Buyer may reasonably request. Such investigation shall not be
deemed in any way to diminish the liability of Selling Parties in respect of
the representations, warranties, schedules, certificates or agreements given
hereunder.
SECTION 4.2 CONDUCT OF BUSINESS BY CORPORATION. From
the date hereof until the Closing Date, except as Buyer may previously consent
in writing or as set forth in Exhibit "4.2," Corporation shall:
A. Carry on its business and activities in the ordinary
course as previously carried on, and shall not make or institute any
methods of management, accounting or operation that will vary
materially from those methods used by Corporation as of the date of
this Agreement. Without limitation of the generality of the
foregoing, Corporation
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shall not enter into any agreement or arrangement involving sale or
lease of a material portion of its assets or the granting of any
preferential right to purchase such assets, properties or rights,
except in connection with the sale or lease of inventory to customers
in the ordinary course of business;
B. Maintain in full force and effect the insurance policies
listed in Exhibit "2.19" to this Agreement;
C. Make no change in its Articles of Incorporation or By-
Laws;
D. Make no change in its authorized or issued capital stock
and issue or grant no options, warrants or rights to purchase shares
of or convert other securities into its capital stock, except that
Corporation may honor any exercise of any option or warrant or the
conversion of any convertible security which option, warrant, or
convertible security was issued and outstanding prior to the date of
this Agreement;
E. Declare or pay no dividend or other distribution in
respect of any shares of its capital.
F. Purchase, redeem or otherwise acquire, directly or
indirectly, no shares of its capital stock;
G. Use its commercially reasonable best efforts to
preserve its business organization intact, to keep available the
services of its present officers and employees, except in the case of
unsatisfactory performance, and to preserve the good will of all those
having business relations with it (including, but not limited to, its
customers);
H. Enter into no contract or commitment, except contracts or
commitments entered into in the ordinary course of business, none of
which (other than inventory purchases customary in nature and amount)
shall involve payment by Corporation of more than $25,000.00;
I. Terminate none of the contracts or agreements listed in
Exhibit "2.25" or modify in any material respect any of said contracts
or agreements except in accordance with their terms;
J. Except pursuant to existing arrangements disclosed in
Exhibit "2.26" or as otherwise permitted under Section 2.26: (i)
grant no increase in salaries or compensation payable or to become
payable by it, to any officer, employee, sales agent or
representative, or (ii) increase no benefits payable under any
employee plan or otherwise to any officer, employee, sales agent or
representative;
K. Duly comply in all material respects with all laws,
regulations, ordinances, orders, injunctions and decrees applicable to
it and to the conduct of its business;
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L. Other than in the ordinary course of business, encumber
or mortgage none of its property or incur no liability for borrowed
money, make no loans or advances to or assume, guarantee, endorse or
otherwise become liable with respect to, the obligations of any other
person, firm or corporation;
M. Acquire or agree to acquire none of the assets or capital
stock of any other person, firm or corporation, except for purchases
from suppliers in the ordinary course of business;
N. Make or agree to make no capital expenditures in excess
of $25,000.00 for any single item, or $25,000.00 in the aggregate, or
enter into any leases of capital equipment or property under which the
annual lease charge is in excess of $25,000.00;
O. Maintain and keep its properties and facilities in the
same condition and working order as at present, except for
depreciation through ordinary wear and tear;
P. Perform all of its obligations under contracts listed on
Exhibit "2.25", except for non-material failures;
Q. Not do, or agree to do, except in the ordinary course of
business, any of the following acts: (i) pay any material obligation
or liability, fixed or contingent, other than current liabilities;
(ii) waive or compromise any material right or claim; or (iii) cancel,
without full payment, any material note, loan or other obligation
owing to Corporation;
R. Enter into no negotiations or agreements with any
governmental authority (other than negotiations or agreements for the
purchase of goods or services from Corporation) which could reasonably
be expected to result in any material adverse effect with respect to
the future operation of its business;
S. Write off none of the receivables on its books; and
T. Enter into agreements with Shareholders, officers and
directors of Corporation or any persons or entities affiliated with
them.
SECTION 4.3 CONSENTS. Corporation shall use its
reasonable efforts to obtain the consent of all persons whose consent is
required to the consummation of the transactions contemplated hereby, in form
and substance satisfactory to Buyer.
SECTION 4.4 COMMUNICATIONS. Except where otherwise
required under federal and state securities laws, each party hereto agrees to
consult and obtain the prior approval of the other parties, which approval
shall not be unreasonably withheld or delayed, on reasonable notice as to the
content of any press releases or any written statements for general circulation
regarding the subject contained in this Agreement.
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SECTION 4.5 UPDATING OF SCHEDULES. From the date hereof
until the Closing Date, Corporation shall keep up to date all of the schedules,
exhibits and certificates furnished (or to be furnished) under this Agreement,
and shall promptly notify Buyer of any changes, additions or events which may,
after the lapse of time, cause any change or addition thereto.
SECTION 4.6 REGISTRATION OF LASON, INC. COMMON STOCK.
A. Subject only to the proviso set forth in the last
sentence of this Section 4.6A, Lason, Inc. will at its own cost and
expense: (i) prepare and file with the SEC a registration statement on
Form S-3, or other applicable form (the "Registration Statement")
under the Act covering the maximum number of shares of Lason, Inc.
that may be issued to Management Shareholders (except for the Group)
pursuant to Section 1.2 hereof and naming Management Shareholders
(except for the Group) as "Selling Shareholders" in the Registration
Statement prior to the end of the lock-up period described in this
Agreement; (ii) have the Registration Statement declared effective by
the SEC prior to the end of the lock up period described in this
Agreement; and (iii) maintain the Registration Statement in effect
until the earlier of: (x) the sale of all of the shares of Lason, Inc.
issued to Management Shareholders (except for the Group) pursuant to
Section 1.2 hereof; or (y) the date Management Shareholders (except
for the Group) may sell such shares without restriction pursuant to
Rule 144(k) under the Act hereunder (currently two years from the
date of the issuance of the shares). Management Shareholders (except
for the Group) agrees to cooperate and provide Lason, Inc. with all
information and consents necessary to permit inclusion of Management
Shareholders (except for the Group) as "Selling Shareholders" in the
Registration Statement. In the event that a registration statement on
Form S-3 cannot be filed due to a change in government regulation,
Lason, Inc. will use its best efforts to accomplish registration
through an alternative means.
B. Lason, Inc. agrees to indemnify and hold harmless the
Management Shareholders (except for the Group) against any losses,
claims, damages or liabilities to which Management Shareholders
(except for the Group) may become subject insofar as such losses,
claims, damages or liabilities arise out of any untrue statement of
any material fact contained in the Registration Statement or arise out
of the omission to state in the Registration Statement a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading; provided, however, that Lason, Inc. shall not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of an untrue statement or omission made in the
Registration Statement in reliance upon and in conformity with
information furnished to Lason, Inc. by Management Shareholders
(except for the Group).
C. Management Shareholders (except for the Group) agree to
indemnify and hold harmless Lason, Inc. against any losses, claims,
damages, or liabilities to which Lason, Inc. may become subject
insofar as such losses, claims, damages or liabilities arise out of
any untrue statement of any material fact contained in the
Registration Statement or arise out of the omission to state in the
Registration Statement a material fact required to be stated therein
or necessary to make the statements therein, and the light of the
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circumstances in which made, not misleading, in each case to the
extent that such untrue statement or omission was made in reliance
upon and in conformity with information furnished to Lason, Inc. by
such Management Shareholders; provided, however, that in no event
shall any such Management Shareholder be liable under this Section
4.6.C. for in excess of the net proceeds received by such Management
Shareholder from the sale of shares of Lason, Inc. made pursuant to
the Registration Statement.
SECTION 4.7 DELIVERY OF LASON STOCK CERTIFICATES.
Buyer and Lason, Inc. shall cause the Transfer Agent (as hereinafter defined)
to issue and deliver to Management Shareholders (except for the Group)
certificates registered in Management Shareholders' (except for the Group)
respective names evidencing the Lason Shares within ten (10) business days
following the Closing Date.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLING PARTIES
The obligations of Selling Parties to consummate the
transactions contemplated by this Agreement shall be subject to the following
conditions, except as Selling Parties may waive in writing in accordance with
Section 10.5 below:
SECTION 5.1 PERFORMANCE. Buyer shall have performed and
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or satisfied by it on or prior to the Closing
Date.
SECTION 5.2 REPRESENTATIONS AND WARRANTIES. The
representations, warranties and covenants of Buyer and Lason, Inc., set forth
in Article 3 hereof, shall be true and correct in all material respects on the
date hereof, and at all times on or prior to the Closing Date, subject to any
transactions which are contemplated or permitted by this Agreement.
SECTION 5.3 CERTIFICATE OF OFFICER. Selling Parties
shall have been furnished with certificates executed by an officer of Buyer and
an officer of Lason, Inc., in form and substance satisfactory to Selling
Parties, certifying the fulfillment of the condition set forth in Section 5.2
above.
SECTION 5.4 LEGAL OPINION. Seyburn, Kahn, Ginn, Bess,
Deitch and Serlin, P.C., counsel for Buyer and Lason, Inc., shall have
delivered to Selling Parties its opinions with respect to this transaction.
SECTION 5.5 EMPLOYMENT AGREEMENTS. Corporation and John
R. Messinger, Michael Riley, J.E. Hendricks and Daniel P. Bailey shall have
entered into the respective Employment Agreements contemplated in Section 6.9
hereof in the forms set forth in Exhibits "5.5-1", "5.5-2", "5.5-3" and
"5.5-4".
SECTION 5.6 AUTHORIZATION OF TRANSACTION. All action
necessary to authorize the execution, delivery and performance of this
Agreement by Buyer and Lason, Inc. and the
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consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Board of Directors of Buyer and Lason, Inc., respectively.
SECTION 5.7 LITIGATION. On or prior to the Closing Date,
there shall be no litigation or proceeding: (i) pending or threatened against
Buyer, Lason, Inc. or Corporation, or any of their respective directors,
officers or shareholders, or involving the assets or properties of any of them,
for the purpose of enjoining or preventing the consummation of this Agreement
or otherwise claiming that such consummation is improper; or (ii) pending
against Buyer, Lason, Inc. or Corporation which, if decided adversely, could
reasonably be expected to adversely affect the right of Buyer to retain the
stock, property and other assets or to continue the operations of the property,
assets and business of Corporation (or of Buyer, Lason, Inc. or any of its
subsidiaries) after the Closing Date, and which, in the judgment of the Board
of Directors of Corporation, would make the consummation of this Agreement
inadvisable. Immediately prior to the Closing Date, there shall be no
governmental investigation pending or threatened which, in the judgment of the
Board of Directors of Buyer or Lason, Inc., might lead to or result in any
litigation or proceeding of the nature referred to in the foregoing sentence.
SECTION 5.8 HSR ACT. All of the legal requirements
imposed under the HSR Act shall have been fulfilled and neither the Federal
Trade Commission nor the Department of Justice shall have instituted an action
to restrain or enjoin the consummation of this transaction.
SECTION 5.9 LASON STOCK BONUS PLAN. Prior to Closing,
those Management Shareholders listed on Exhibit "5.9." (the "Participants")
shall receive notice of their participation in the "Lason Stock Bonus Plan".
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the following conditions,
except as Buyer may waive in writing in accordance with Section 10.5 below:
SECTION 6.1 AUTHORIZATION OF TRANSACTION. All action
necessary to authorize the execution, delivery and performance of this
Agreement by Selling Parties and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the Board of
Directors of Corporation and by the Shareholders.
SECTION 6.2 MATERIAL ADVERSE CHANGE. Since January 1,
1997, there shall have been no material adverse change in the financial
condition, earnings, business, assets, liabilities, properties, operations or,
to the knowledge of the Selling Parties, prospects of Corporation, and there
shall not have been any occurrence, circumstance or combination thereof
(whether arising heretofore or hereafter), including litigation pending or
threatened, which could reasonably be expected to result in any such material
adverse change before or after the Closing Date.
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SECTION 6.3 REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Selling Parties contained in this Agreement,
as updated pursuant to Section 4.5, shall be true and correct in all material
respects on the date hereof and at all times on or prior to the Closing Date
(except to the extent that any such representation or warranty had by its terms
been made as of a specific date in which case such representation or warranty
shall have been true and correct as of such specific date), and Selling Parties
shall have performed or complied in all material respects with all obligations,
covenants and conditions required by this Agreement to be performed or complied
with by them prior to or on the Closing Date.
SECTION 6.4 CERTIFICATE OF SELLING PARTIES. Buyer shall
have been furnished with a certificate executed by an officer of Corporation
and certificates executed by the Shareholders, in form and substance
satisfactory to Buyer, certifying to the fulfillment of the condition set forth
in Section 6.3 above.
SECTION 6.5 LEGAL OPINION. Foley & Lardner, counsel for
Shareholders and Corporation shall have delivered to Buyer its opinions with
respect to this transaction.
SECTION 6.6 LITIGATION. On or prior to the Closing Date,
there shall be no litigation or proceeding: (i) pending or threatened against
Buyer, Lason, Inc. or Corporation, or any of their respective directors,
officers or shareholders, or involving the assets or properties of any of them,
for the purpose of enjoining or preventing the consummation of this Agreement
or otherwise claiming that such consummation is improper; or (ii) pending
against Buyer, Lason, Inc. or Corporation which, if decided adversely, could
reasonably be expected to adversely affect the right of Buyer to retain the
stock, property and other assets or to continue the operations of the property,
assets and business of Corporation (or of Buyer, Lason, Inc. or any of its
subsidiaries) after the Closing Date, and which, in the judgment of the Board
of Directors of Buyer or Lason, Inc., would make the consummation of this
Agreement inadvisable. Immediately prior to the Closing Date, there shall be
no governmental investigation pending or threatened which, in the judgment of
the Board of Directors of Buyer or Lason, Inc., might lead to or result in any
litigation or proceeding of the nature referred to in the foregoing sentence.
SECTION 6.7 THIRD PARTY CONSENTS. Prior to the Closing,
Corporation shall have obtained the written consent, waiver or approval of each
person: (i) who is a party to a contract or agreement with Corporation or a
contract or agreement by which Corporation or its property is bound; (ii) whose
consent, waiver or approval is required under such contract or agreement as a
result of consummation of the transactions contemplated by this Agreement; and
(iii) whose failure to provide such consent, waiver or approval would have or
might reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), earnings, business, assets, liabilities, operations
or, to the knowledge of Selling Parties, prospects of Corporation.
SECTION 6.8 CORPORATE ACTION. Immediately prior to the
Closing, Buyer shall have received, in form and substance reasonably
satisfactory to Buyer, the resignations of such officers and directors of
Corporation, effective as of the Closing Date, as Buyer may have stipulated to
Corporation in writing prior to the Closing Date.
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SECTION 6.9 EMPLOYMENT AGREEMENTS. Corporation and John
R. Messinger, Michael Riley, J.E. Hendricks and Daniel P. Bailey shall have
executed and delivered to Buyer employment agreements with Corporation on
mutually acceptable terms and conditions.
SECTION 6.10 HSR ACT. All of the legal requirements
imposed under the HSR Act shall have been fulfilled and neither the Federal
Trade Commission nor the Department of Justice shall have instituted an action
to restrain or enjoin the consummation of this transaction.
SECTION 6.11 1996 AUDITED FINANCIAL STATEMENT. Prior to
Closing, Corporation shall have delivered to Buyer the 1996 Audited Financial
Statement. Such 1996 Audited Financial Statement must be satisfactory to Buyer
in all respects as determined in the exercise of its sole, absolute and
exclusive discretion. Buyer shall have 24 hours from receipt of the 1996
Audited Financial Statement to determine whether it is satisfactory.
ARTICLE 7
THE PRE-CLOSING AND THE CLOSING
SECTION 7.1 TIME AND PLACE OF PRE-CLOSING AND CLOSING.
The execution and delivery of the Agreement and all of the related ancillary
documents and instruments, including but not limited to the items specified in
Section 7.2 and Section 7.3 (the "Transactional Documents") by the parties
shall take place at the offices of Foley & Lardner, in Chicago, Illinois on
July 17, 1997, or at such other time and place as the parties may agree to in
writing (the "Pre-Closing"). To the extent that any Transactional Documents
cannot be completed until Closing, the parties agree that the format of such
Transactional Documents generally set forth in Sections 7.2 and 7.3, to the
extent deposited with the Escrow Agent, are hereby accepted and will not be
changed unless mutually agreed to. Until the Closing (as defined hereinafter),
or termination pursuant to Section 10.11, Seyburn, Kahn, Ginn, Bess, Deitch and
Serlin, P.C. (the "Escrow Agent") shall hold all executed and delivered
Transactional Documents in escrow pursuant to the terms and conditions of an
escrow agreement (the "Pre-Closing Escrow Agreement") in the form of Exhibit
"7.1" hereto.
Unless earlier terminated pursuant to Section 10.10, the
closing (the "Closing") shall occur on the first business day from the later to
occur of (A) the earlier to occur of: (i) expiration of the HSR Act waiting
period; or (ii) early termination of the HSR Act waiting period , or (B)
Buyer's determination that the 1996 Audited Financial Statement is satisfactory
as provide in Section 6.11 (the "Closing Date").
On the Closing Date, the parties shall meet at the offices of
Foley & Lardner, in Chicago, Illinois, at 10:00 a.m. local time, to perform the
ministerial tasks remaining, including but not limited to, release of the
Transactional Documents by the Escrow Agent to the applicable parties,
completion of any blanks in any of the Transactional Documents (including
Exhibits 1.2.A. and 1.2.B), delivery of the opinions of counsel as provided in
Sections 5.4 and 6.5, payment by the Buyer of the Purchase Price for the Shares
pursuant to Section 1.2, payoff letters
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and discharges of liens relative to the Scheduled Liabilities and consent of
the landlord of the Atlanta Facility. Buyer and Shareholders agree that to the
extent options or warrants for Shares have not been exercised or checks
delivered to Corporation in connection with the exercise of options or warrants
have not been cashed by Corporation on or before the Closing Date, the purchase
price for the Shares issuable in connection with such options and warrants
shall be reduced by the respective exercise prices of such options and warrants
and such checks shall be returned to the issuing Shareholders.
SECTION 7.2 SELLING PARTIES' OBLIGATIONS AT PRE-CLOSING.
At the Pre-Closing, Selling Parties shall deliver to Escrow Agent the following
instruments, in form and substance satisfactory to Buyer and its counsel,
against delivery of the items specified in Section 7.3:
A. Certificates representing the Shares, registered in the
names of the Shareholders, duly endorsed by the Shareholders for
transfer as specified in Section 1.1 above or accompanied by separate
written instruments of assignment;
B. The stock book, stock ledger, minute book and corporate
seal of Corporation;
C. Except as otherwise specified by Buyer, the executed
written resignations of all the officers and directors of Corporation;
D. The certificates to be dated the Closing Date, as
provided in Section 6.4 in the format as forth in Exhibit "7.2.D.";
E. The executed Lock-Up Agreements as provided in Section
1.2;
F. The executed Employment Agreements contemplated in
Section 6.9;
G. The executed certified resolution of Corporation's Board
of Directors authorizing the execution, delivery and performance of
this Agreement and all actions to be taken by Corporation under this
Agreement;
H. The executed Guaranty of Horizon Capital Partners as
provided in Section 9.10;
I. The executed Incumbency Certificate of officer of
Corporation;
J. The executed Escrow Agreement as provided in Section
9.8; and
K. Such other and further instruments as counsel for Buyer
may reasonably request.
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SECTION 7.3 BUYER'S OBLIGATIONS AT PRE-CLOSING. At the
Pre-Closing, Buyer shall deliver to Escrow Agent the following instruments and
documents against delivery of the items specified in Section 7.2:
A. Original Issue Order Form No. 1 addressed to The First
Chicago Trust Company (the "Transfer Agent") directing the Transfer
Agent to issue Lason Shares to the Management Shareholders in the
format as set forth in Exhibit "7.3.A.";
B. Executed certified resolutions of Buyer's and Lason,
Inc.'s Boards of Directors, in form reasonably satisfactory to counsel
for Selling Parties, authorizing the execution, delivery and
performance of this Agreement and all actions to be taken by Buyer and
Lason, Inc. under this Agreement;
C. The certificate to be dated the Closing Date, as
provided in Section 5.3 in the format as set forth in Exhibit
"7.3.C.";
D. The Closing Statement in the format as set forth in
Exhibit "7.3.D.";
E. The Wire Transfer Instructions in the format as set
forth in Exhibit "7.3.E.";
F. Stock Option Agreements - Grantees with Employment
Agreements in the form of Exhibit "7.3.F." to the persons listed in
Exhibit "7.3.F.";
G. Stock Option Agreements - Grantees without Employment
Agreements in the form of Exhibit "7.3.G." to the persons listed in
Exhibit "7.3.G.";
H. Escrow Agreement regarding the Lason Shares in the form
of Exhibit "9.8";
I. Assignments Separate From Certificate for Lason Shares;
and
J. Such other and further instruments as counsel for
Selling Parties may reasonably request.
ARTICLE 8
OBLIGATIONS AFTER CLOSING
SECTION 8.1 AGREEMENT TO REFRAIN FROM COMPETITION. The
provisions of Section 8.1 shall apply only to those Shareholders who are not
entering into the Employment Agreements contemplated in Section 6.10 hereof and
who are listed on Exhibit "8.1" (the "Investor Shareholders"); it being
acknowledged that the non-competition agreements of the Shareholders entering
into such Employment Agreements will be contained in such Employment
Agreements.
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(a) Non-Competition and Solicitation. For and in
consideration of One Thousand and No/100 ($1,000.00) Dollars, which is a
portion of the Purchase Price, and the economic benefits accruing to Investor
Shareholders generally hereunder, Investor Shareholders agree that for the
twenty-four (24) month period immediately following the Closing Date (the
"Non-Compete Period"), Investor Shareholders shall not, either directly or
indirectly (and whether or not for compensation), work for, be employed by,
own, participate or engage in, or have any interest in, any person, firm,
entity, partnership, limited partnership, limited liability company,
corporation or business (whether as an employee, owner, partner, member,
shareholder, officer, director, agent, creditor, consultant or in any capacity
which calls for the rendering of personal services, advice, acts of management,
operation or control) which is substantially the same as or competitive with
the activities engaged in by Corporation or Buyer, including but not limited to
the following: photocopying, imaging, scanning and conversion, related services
ancillary to all of the foregoing and outgrowths thereof (the "Business") so
long as Corporation or Buyer shall, directly or indirectly, be engaged in such
activity in the following States: Arkansas, California, Connecticut, Delaware,
Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana,
Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio,
Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia and
Wisconsin (the "Restricted Territory"). The foregoing shall not, however, be
deemed to prevent Investor Shareholders from individually and collectively
owning in the aggregate up to 5.0% of the securities of any corporation the
shares of which are traded on a securities exchange or in the over-the-counter
market.
Investor Shareholders further agree that they shall not,
directly or indirectly, at any time during the Non-Compete Period: (i) divert
or attempt to divert from Corporation or Buyer any Business whether in the
Restricted Territory or not; (ii) solicit, contact, call upon or attempt to
solicit, or provide services to, any of Corporation's or Buyer's customers,
suppliers or actively sought potential customers or suppliers for the purpose
of doing anything within the definition of the Business or any work reasonably
related to the Business whether in the Restricted Territory or not; or (iii)
induce or attempt to induce any person who is an employee of Corporation or
Buyer to leave the employ of Corporation or Buyer.
(b) Confidentiality. During the Non-Compete Period, Investor
Shareholders shall keep secret and inviolate and shall not divulge,
communicate, use to the detriment of Corporation or Buyer or for the benefit of
any other person or persons or misuse in any way any knowledge or information
of a confidential nature, including, without limitation, all trade secrets,
information, computer programs, technical data, customer lists and unpublished
matters relating to the business, assets, accounts, books, records, customers
and contracts of Corporation or Buyer which they may know as a result of their
association with and which is unique to Corporation or Buyer ("Confidential
Information"). Investor Shareholders may disclose Confidential Information if
required by any judicial or governmental request, requirement or order;
provided that Investor Shareholders will take reasonable steps to give
Corporation and Buyer sufficient prior notice in order to contest such request,
requirement or order.
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(c) Remedies. Investor Shareholders have had knowledge of the
affairs, trade secrets, customers, potential customers and other proprietary
information of Corporation and Buyer, and Investor Shareholders acknowledge
and agree that compliance with the covenants set forth in this Section 8.1 is
necessary for the protection of the Business, goodwill and other proprietary
interests of Corporation and Buyer and that any violation of this Section 8.1
will cause severe and irreparable injury to the Business and goodwill of
Corporation and Buyer, which injury is not compensable by money damages.
Accordingly, in the event of a breach (or threatened or attempted breach) of
this Section 8.1, Corporation and Buyer shall, in addition to any other rights
and remedies, be entitled to immediate appropriate injunctive relief or a
decree of specific performance, without the necessity of showing any
irreparable injury or special damages.
If, in any judicial proceeding, a court shall refuse to
enforce any of the covenants included herein, then said unenforceable
covenant(s) shall be deemed eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced. It is the intent and agreement of Buyer and Investor
Shareholders that these covenants be given the maximum force, effect and
application permissible under law.
The provisions of this Section 8.1 shall survive the
termination of this Agreement.
SECTION 8.2 FURTHER ASSURANCES. From time to time, at
Buyer's request (whether or not after the Closing), and without further
consideration and at the expense of Buyer, Shareholders will execute and
deliver to Buyer such other documents, and take such other action, as Buyer may
reasonably request in order to consummate more effectively the transactions
contemplated by this Agreement, and to vest in Buyer good, valid and marketable
title to the Shares.
ARTICLE 9
INDEMNIFICATION
SECTION 9.1 BUYER'S INDEMNITY. Buyer agrees to indemnify
and hold harmless Shareholders from and against, and in respect to, any and all
losses, expenses, costs, obligations, liabilities and damages, including
interest, penalties and reasonable attorneys' fees and expenses (collectively,
"Losses") they may incur by reason of: (i) Buyer's breach of or failure to
perform any of its representations, warranties, commitments, covenants or
agreements in this Agreement, or in any instrument, agreement or exhibit
furnished or to be furnished by or on behalf of Buyer under this Agreement; or
(ii) any act or omission of Buyer or Corporation, or any of their respective
successors or assigns, after the Closing Date, that constitutes a breach or
default under, or a failure to perform any obligation, duty or liability of
Buyer or Corporation, respectively, under any loan agreement, lease, contract,
order or other agreement (relating to the business of Corporation) to which
Buyer or Corporation, respectively, is a party or by which any of them is
bound.
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SECTION 9.2 SHAREHOLDERS' INDEMNITY. Shareholders hereby
indemnify, defend and hold harmless Buyer from and against, and in respect to,
any and all losses, expenses, costs, obligations, liabilities and damages
including interest, penalties and reasonable attorneys' fees and expenses,
that Buyer may incur by reason of (i) Selling Parties' breach of any of their
representations and warranties, in this Agreement, including any exhibit
hereto, including, but not limited to, the representations and warranties of
Corporation in this Agreement, including any exhibit hereto; or (ii)
Shareholders' failure to perform under Sections 4.6.C., 8.1, or 8.2, of this
Agreement.
SECTION 9.3 METHOD OF ASSERTING CLAIMS. The party seeking
indemnification (the "Indemnitee") will give prompt written notice to the other
party or parties (the "Indemnitor") of any claim ("Claim") which it discovers
or of which it receives notice after the Closing and which might give rise to a
Claim by it against Indemnitor under either Section 9.1 or 9.2 hereof as the
case may be, stating the nature, basis and (to the extent known) amount
thereof; provided that failure to give prompt notice shall not jeopardize
Indemnitee's right to indemnification unless such failure shall have materially
prejudiced the ability of Indemnitor to defend such Claim.
SECTION 9.4 ARBITRATION. Except with respect to Third
Party Claims as set forth in Section 9.5 below and as specifically set forth in
the last paragraph of this Section 9.4, with respect to all other Claims of
Buyer, Management Shareholders through their representative, John R. Messinger,
and Non-Management Shareholders, through their representative, Paul W. Sweeney,
respectively, shall have a reasonable opportunity to confirm such Claim, at
their expense and within 30 business days after receipt of the aforesaid
notice, including, without limitation, review by them or by an attorney and/or
accountant retained by them of the factual basis for such Claim. Buyer agrees
to cooperate with any such confirmation request and make available to Mr.
Messinger or Mr. Sweeney, respectively, or to the attorney and/or accountant
appointed by either of them, at all reasonable times, for inspection and
review, the books and records of Buyer relating to the Claim, including, but
not limited to, any worksheets relating to computation of the Claim.
If, as a result of the confirmation, Mr. Messinger or Mr.
Sweeney, as applicable, does not agree that Buyer is entitled to
indemnification with respect to the Claim and such disagreement cannot, with
good faith effort, be promptly settled within an additional 10 business days,
Buyer and Mr. Messinger or Mr. Sweeney, as applicable, shall each appoint
within 5 business days an arbitrator, and the two arbitrators so appointed
shall appoint a third arbitrator. If said two arbitrators cannot agree on the
selection of a third arbitrator within the next 10 business days, then either
Buyer or Mr. Messinger or Mr. Sweeney, as applicable, shall be entitled to
apply to the American Arbitration Association sitting in the Chicago
metropolitan area for the selection of a third arbitrator who shall then
participate in such arbitration proceedings, and who shall be selected from a
list of arbitrators possessing the qualifications set forth below. Any
arbitrator appointed pursuant to this Section 9.4 shall be a qualified expert
with generally recognized current competence in mergers and acquisitions and
complex business transactions. Except as otherwise provided herein, such
arbitration shall be conducted at Chicago, Illinois in accordance with the then
applicable Commercial Arbitration Rules of the American Arbitration
Association.
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Within 30 business days of the date of selection of the last
of the arbitrators to be selected by the foregoing procedure, the arbitrators
shall furnish the parties with their written determination. Such written
determination shall be certified and signed by at least a majority of the
arbitrators, and shall be final and binding on the parties. Judgment may be
entered on any award rendered by the arbitrators in any federal or state court
having jurisdiction over the parties. Each of Buyer and Mr. Messinger or Mr.
Sweeney as agents for the Management Shareholders and the Non-Management
Shareholders, respectively, as applicable, shall pay the arbitrator selected by
it, and the costs of the third arbitrator shall be paid 1/2 by Buyer and 1/2
by Mr. Messinger or Mr. Sweeney as agents for the Management Shareholders and
the Non-Management Shareholders, respectively, as applicable.
It is understood and agreed that: (i) Mr. Messinger and Mr.
Sweeney have full authority to act and to bind the Management Shareholders and
the Non-Management Shareholders, respectively; (ii) the arbitration
methodologies set forth in this Section 9.4 represent Buyer's sole available
procedural remedy for enforcement of the indemnity provided for in this
Agreement; and (iii) the extent of Shareholders' liability for damages for a
breach of any of the representations, warranties, covenants or agreements in
this Agreement, shall be limited to the remedies, procedures and limitations
set forth in this Article 9; provided, however, that, in all cases involving
enforcement of a covenant not to compete or a confidentiality agreement and
with regard to other Claims, if after attempting to resolve any such Claim
through good faith negotiations as provided above, if a party in good faith
believes that resolution of its Claim will require equitable relief it may file
suit in a court of competent jurisdiction in lieu of arbitration.
SECTION 9.5 THIRD PARTY CLAIMS. In case of any Claim,
suit or proceeding by a third party or by any government body, or any legal,
administrative or arbitration proceedings with respect to which Indemnitor may
have liability under the indemnity agreement contained in either Section 9.1.
or 9.2 as the case may be, Indemnitor shall be entitled to participate therein,
and, to the extent desired by Indemnitor, to assume the defense thereof at its
own expense and through counsel of its own choosing, and after notice from
Indemnitor to Indemnitee of the election so to assume the defense thereof,
Indemnitor will not be liable to Indemnitee for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof,
other than reasonable costs of investigation, unless Indemnitor does not
actually assume the defense thereof following notice of such election. The
parties will render each other such assistance as may reasonably be required of
each other in order to insure proper and adequate defense of any such suit,
Claim or proceeding. Indemnitee will not make any settlement of any suit,
Claim or proceeding which might give rise to liability of Indemnitor under the
indemnity agreements contained in either Section 9.1 or 9.2 hereof as the case
may be without the written consent of Indemnitor, which consent shall not be
unreasonably withheld. If Indemnitor shall desire and be able to effect, a
bona fide compromise or settlement of any such suit, Claim, or proceeding and
Indemnitee shall unreasonably refuse to consent to such compromise or
settlement, then Indemnitor's liability under either Section 9.1 or 9.2 as the
case may be with respect to such suit, Claim or proceeding shall be limited to
the amount so offered in compromise or settlement together with all legal and
other expenses which may have been incurred prior to the date on which
Indemnitee has refused to consent to such compromise or settlement.
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SECTION 9.6 SURVIVAL OF SHAREHOLDERS' INDEMNITY OBLIGATIONS.
Shareholders' liability for a breach of the representations, warranties and
covenants made by the Selling Parties in this Agreement, or in any schedule,
exhibit, certificate or other document delivered in connection with this
Agreement, shall not be deemed to be waived or otherwise affected by any
investigation made by Buyer and shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby.
SECTION 9.7 SURVIVAL OF BUYER'S INDEMNITY OBLIGATIONS.
Buyer's liability for a breach of the representations, warranties and covenants
made by Buyer in this Agreement, or in any schedule, exhibit, certificate or
other document delivered in connection with this Agreement shall not be deemed
to be waived or otherwise affected by any investigation made by Shareholders
and shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
SECTION 9.8 LIMITATION ON INDEMNIFICATION. Except as set
forth herein, the following limitations shall apply to the rights of
indemnification set forth in Section 9.1 and 9.2 hereof as applicable: (i) the
liability of the Indemnitor shall be net of any insurance benefits received by
Indemnitee (or in the case of indemnification by Shareholders, insurance
benefits received by Corporation) and any tax benefits received by Indemnitee
(or in the case of indemnification by Shareholder's, tax benefits received by
Corporation) in respect of the loss giving rise to the Claim for
indemnification; (ii) any indemnification payments made by Buyer shall
constitute a reduction, and any indemnification payments made by Shareholders
shall constitute an increase, of the Purchase Price; (iii) no indemnification
shall be required from Shareholders until the aggregate amount of Buyer's
Losses exceeds $200,000.00, and in the event that Buyer's damages exceed
$200,000.00, in the aggregate, from 1 or more Claims, Shareholders' indemnity
obligations will be for indemnification of only such amount of Buyer's damages
in excess of $200,000.00, (and where such damages are with respect to one or
more uncollected accounts receivable pursuant to Section 2.12, the amount of
damages must also exceed the reserve established for accounts receivable on the
books of Corporation at the Closing Date and in the event indemnification is
paid to Buyer with respect to certain uncollected accounts receivable pursuant
to Section 2.12, Buyer shall assign such accounts receivable to Shareholders);
(iv) each Shareholder's indemnity obligation will be limited to the amount of
Equity Payment received by such Shareholder; (v) each Shareholder will be
solely responsible for his breach of or failure to perform under Sections 2.3,
4.6.C., 8.1 or 8.2 of this Agreement; (vi) no indemnification shall be required
unless a Claim for indemnification is first made within 12 months of the
Closing Date except for claims arising out of Section 2.2 or 2.3 hereof which
shall be of unlimited duration; and (vii) the indemnifying parties shall not be
liable for consequential damages except for attorney fees. In order to
facilitate the payment of any indemnification owed to Buyer by Shareholders,
Management Shareholders agree to escrow the Lason Shares they receive (Section
1.2.B.2 Shares") in accordance with Section 1.2.B.2 above (together with any
Lason Shares received in addition to, in substitution of, or in exchange for
any Section 1.2.B.2 Shares (whether as a distribution in connection with any
reorganization or reclassification, stock dividend or otherwise)) with Seyburn,
Kahn, Ginn, Bess, Deitch and Serlin, P.C., counsel to Lason, Inc., pursuant to
an Escrow Agreement in the form of Exhibit 9.8 hereto and to execute
assignments separate from certificate in blank to enable a re-assignment of
their Section 1.2.B.2 Shares in case Buyer determines to use any or all of the
Section 1.2.B.2 Shares as payment
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of any indemnification owed to Buyer. Buyer may seek indemnification from
Horizon Capital Partners pursuant to the Guaranty set forth in Section 9.10,
from the escrowed Section 1.2.B.2 Shares (as adjusted), pursuant to other means
available to Buyer under this Agreement, or any combination of the foregoing.
For purposes of this Section 9.8, the escrowed Section 1.2.B.2 Shares will be
valued per share at the price set forth in Section 1.2.B.2 hereof (as adjusted
for any distribution noted above). Buyer, in its sole discretion, may seek
indemnification from Horizon Capital Partners pursuant to the Guaranty set
forth in Section 9.10, from the escrowed Section 1.2.B.2 Shares (as adjusted),
pursuant to other means available to Buyer under this Agreement, or any
combination of the foregoing.
SECTION 9.9 EXCLUSIVE REMEDY. The parties hereto agree that,
after the Closing, the remedies provided by this Article 9 shall be the sole
and exclusive remedy of Buyer, Shareholders and Corporation for any claim or
cause of action arising out of or relating to the negotiation, execution,
delivery, performance or breach of this Agreement (whether such claim or cause
of action is based on breach of contract, misrepresentation, tort, violation of
statute, or otherwise), other than claims for injunctive relief where
appropriate or as otherwise provided under Sections 4.6.C. and 8.1.
SECTION 9.10 GUARANTY OF INDEMNIFICATION OBLIGATIONS OF
NON-MANAGEMENT SHAREHOLDERS. Horizon Capital Partners agrees that it shall
execute and deliver to Buyer at the Closing the form of Guaranty attached as
Exhibit "9.10" guaranteeing the indemnification obligations of the
Non-Management Shareholders under this Article 9 up to the amount of the Equity
Payment paid to the Non-Management Shareholders as provided in Section 1.2.B.1
above.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1 FINDER'S OR BROKER'S FEES. Each of the
parties represents and warrants that it has dealt with no broker or finder in
connection with any of the transactions contemplated by this Agreement, and,
insofar as it knows, no broker or other person is entitled to any commission or
finder's fee in connection with any of these transactions. Selling Parties, on
the one hand, and Buyer and Lason, Inc. on the other hand, each agree to
indemnify and hold harmless one another against any loss, liability, damage,
cost, claim or expense incurred by reason of any brokerage, commission or
finder's fee alleged to be payable by reason of any act, omission or statement
of the indemnifying party.
SECTION 10.2 EXPENSES. Except as otherwise expressly
provided herein and in Section 10.12 below, Buyer and Shareholders shall,
individually, pay all costs and expenses incurred or to be incurred by either
of them in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated hereby. Notwithstanding the foregoing,
Corporation shall pay the reasonable fees and expenses of Foley & Lardner
incurred by Shareholders and Corporation in connection with the negotiation and
preparation of this Agreement and the other agreements contemplated hereby and
in closing the transactions contemplated herein and any portion of the
Scheduled Liabilities attributable to the payment of
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such legal fees and expenses shall not reduce the Equity Payment owing to the
Shareholders under Section 1.2.B.
SECTION 10.3 EFFECT OF HEADINGS. The subject headings of
the Articles and Sections of this Agreement are included for purposes of
convenience only, and shall not affect the construction or interpretation of
any of the provisions hereof.
SECTION 10.4 ENTIRE AGREEMENT; MODIFICATION. This
Agreement, together with all of the exhibits furnished hereunder, constitute
the sole and entire agreement between the parties pertaining to the subject
matter contained herein, and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by all the parties.
SECTION 10.5 WAIVER. Buyer may waive in writing
compliance by Shareholders, and Selling Parties may waive in writing compliance
by Buyer or Lason, Inc., with any of the covenants or conditions contained in
this Agreement, except those conditions imposed by law. No act, failure to
act, practice or custom shall constitute an implied waiver of full compliance
with any of the provisions hereof. The granting of a written waiver pursuant
to this Section shall apply, unless expressly set forth therein to the
contrary, only to the specific incident of noncompliance with the specific
provisions of this Agreement set forth therein.
SECTION 10.6 COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
SECTION 10.7 PARTIES IN INTEREST. Nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties to it and their respective successors and assigns, or is intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement. None of the provisions hereof shall be deemed to give
any third persons any right of subrogation or action over or against any party
to this Agreement.
SECTION 10.8 BINDING EFFECT. This Agreement shall be
binding on, and shall inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and assigns except that no
party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other parties to this Agreement.
SECTION 10.9 RECOVERY OF LITIGATION COSTS. If any legal
action or any arbitration or other proceeding is brought for the enforcement of
this Agreement or by reason of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties as determined by the judge or
arbitrator presiding over such legal action or arbitration shall be entitled to
recover reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled.
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SECTION 10.10 TERMINATION EVENTS. This Agreement may, by
notice given prior to or at the Closing, be terminated:
(a) by Buyer if the conditions in Article 6 have not been
satisfied on or before the Closing Date and (other than Section 6.10)
Buyer has not waived such condition on or before the Closing Date; or
by Selling Parties if the conditions in Article 5 have not been
satisfied on or before the Closing Date and (other than Section 5.8)
Selling Parties have not waived such condition on or before the
Closing Date;
(b) by mutual consent of Buyer and Selling Parties; or
(c) by either Buyer or Selling Parties if the Closing has
not occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before September 30, 1997, or such later date as
the parties may agree upon.
SECTION 10.11 EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to Section 10.10, all further obligations of the parties
under this Agreement will terminate; provided, however, that if this Agreement
is terminated by a party because of the material breach of the Agreement by the
other party or because one or more of the conditions to the terminating party's
obligation under this Agreement is not satisfied as a result of the other
party's material failure to comply with its obligations under this Agreement,
the terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
SECTION 10.12 HSR ACT. Buyer and Selling Parties shall
cooperate in good faith in complying with the HSR Act and in attempting to
secure early termination of the applicable HSR Act waiting period. In
connection therewith, Buyer acknowledges that it paid and is solely responsible
for the initial HSR Act filing fee in the amount of $45,000.00. As a
pre-condition to the obligations of Buyer to consummate the transaction
contemplated by this Agreement, Selling Parties shall have fully complied with
the applicable provisions of the HSR Act, and any and all applicable waiting
periods thereunder shall have expired, or an opinion reasonably acceptable to
Buyer stating that no such filing is required shall have been delivered to
Buyer. As a pre-condition to the obligations of Selling Parties to consummate
the transaction contemplated by this Agreement, Buyer shall have fully complied
with the applicable provisions of the HSR Act, and any and all applicable
waiting periods thereunder shall have expired, or an opinion reasonably
acceptable to Selling Parties stating that no such filing is required shall
have been delivered to Selling Parties.
SECTION 10.13 APPOINTMENT OF REPRESENTATIVES. The
Management Shareholders hereby appoint Mr. Messinger and the Non-Management
Shareholder hereby appoint Mr. Sweeney as their respective agents and
representatives to sign on their behalf with full authority to bind them all
Transactional Documents (except for this Agreement, the Assignments Separate
from Certificate relating to the Shares and the Lason Shares and the Lock-Up
Agreements), and such other documents as Mr. Messinger and Mr. Sweeney
reasonably believe are necessary to either close the transaction or are
necessary post-closing to "clean-up" any outstanding matters.
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SECTION 10.14 NOTICES. All notices, requests, demands and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given on the date of service if
served personally on the party to whom notice is to be given, or on the fifth
(5th) day after mailing if mailed to the party to whom notice is to be given,
by first-class mail, registered or certified, postage paid and properly
addressed as follows:
To Shareholders and
Corporation At: 717 W. Algonquin Road
Arlington Heights, Illinois 60005
With A Copy To: Edwin D. Mason, Esq.
Foley & Lardner
One IBM Plaza - Suite 3300
330 N. Wabash Avenue
Chicago, Illinois 60611-3608
Horizon Partners, Ltd.
225 E. Mason Street
Milwaukee, Wisconsin 53202
Attention: Paul W. Sweeney
To Buyer At: Lason Systems, Inc.
1305 Stephenson Highway
Troy, Michigan 48084
Attn: Gary L. Monroe, President
With A Copy To: Laurence B. Deitch, Esq.
Seyburn, Kahn, Ginn, Bess, Deitch
And Serlin
2000 Town Center, Suite 1500
Southfield, Michigan 48075-1195
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
SECTION 10.15 CHOICE OF LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois
without giving effect to conflict of law rules.
SECTION 10.16 STOCKHOLDERS AGREEMENTS. The Shareholders
hereby agree that effective as of the Closing Date, any stockholder agreement
or other agreement, including any amendment or supplement thereto, between each
of the respective Shareholders and the Corporation with respect to the Shares
or securities relating to the Shares or any options or warrants with respect
thereto shall be terminated and rendered of no further force or effect.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
THIS AGREEMENT was executed as of the date and year first set forth
above.
BUYER:
LASON SYSTEMS, INC.,
a Delaware corporation
By:
----------------------------------------
William J. Rauwerdink
Its: Executive Vice President
CORPORATION:
IMAGE CONVERSION SYSTEMS, INC.,
a Delaware Corporation
By:
---------------------------------------
John R. Messinger
Its: President
---------------------------------------
PARENT OF BUYER:
LASON, INC.,
a Delaware corporation
(solely for the purpose of being bound by
Section 1.2, Article 3 and Section 4.6 of
this Agreement)
By:
----------------------------------------
William J. Rauwerdink
Its: Executive Vice President
[Signatures continued]
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MANAGEMENT SHAREHOLDERS:
________________________________ ____________________________________
Robert Abbinate Peter Goodrich
_______________________________ ____________________________________
James Athmann Sheryl Hehn
______________________________ ____________________________________
Daniel Bailey John E. Hendricks
_______________________________ ____________________________________
Rick Bissen Thomas Joyce
_______________________________ ____________________________________
Jeffrey Culmone John R. Messinger
_______________________________ ____________________________________
Glenn Dedering Theresa Lester
_______________________________ ____________________________________
Mario Disantis Michael Polo
_______________________________ ____________________________________
John Elder Michael Riley
_______________________________ ____________________________________
Donald Ferling Richard Roos
_______________________________ ____________________________________
Michael Furmanski Arun Singh
_______________________________ ____________________________________
Geoffrey Gitelson Peter Szymaszek
____________________________________
Timothy Wheeler
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NON-MANAGEMENT SHAREHOLDERS:
Horizon Capital Partners I
Limited Partnership,
a Delaware limited partnership
By: Horizon Ventures Associates
By: ___________________________
Paul W. Sweeney
Its: General Partner
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NON-MANAGEMENT SHAREHOLDERS:
_______________________________
Paul W. Sweeney
_______________________________ ____________________________________
Lanny A. Passaro John G. Robinson
_______________________________ ____________________________________
Albert P. Degen M.E. Nevins
_______________________________ ____________________________________
Verne R. Read Charles E. Swanson
_______________________________ ____________________________________
AMS-J Trust, John M. Scott, Jr., Trustee George F. Haddix
_______________________________ ____________________________________
Robert M. Feerick Paul A. Stewart
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GUARANTY
The undersigned Lason, Inc. a Delaware corporation, as 100%
shareholder of Lason, Systems, Inc., a Delaware corporation does hereby
guaranty to pay and perform, when due, all obligations of the Buyer under the
above-attached Agreement (the "Agreement").
Guarantor further agrees: (i) to any modifications of any terms or
conditions of the Agreement and/or to any extensions or renewals of time of
payment or performance by Buyer, (ii) that it shall not be necessary for
Shareholder to resort to legal remedies against Buyer before proceeding against
Guarantor for payment; provided, however, that Guarantor shall have available
to it any defenses which would be available to Buyer under the Agreement or
otherwise. Guarantor waives notice of any election, acceptance, demand,
protest, notice of protest and notice of default, presentment for payment and
diligence in collection.
No postponement or delay on the part of Shareholders in the
enforcement of any right hereunder shall constitute a waiver of such right, and
all rights of Shareholders shall be cumulative and not alternative and shall be
in addition to any other rights granted to Shareholders in any other agreement,
or by law. If any provisions hereof shall be, or shall be declared to be,
illegal or unenforceable in any respect, such illegal or unenforceable
provision shall be and become absolutely null and void and of no force and
effect, but all other covenants, terms, conditions and provisions hereof shall
nevertheless continue to be valid and enforceable and this Guaranty shall be so
construed. This Guaranty may not be terminated by any act of Guarantor and
shall continue in full force and effect for so long as any obligations of Buyer
under the Agreement remain outstanding.
This Guaranty shall be governed in all respects by the laws of the
State of Illinois without giving effect to conflict of law rules. This
Guaranty shall be binding on and shall inure to the benefit of Guarantor and
Shareholders and their respective heirs, legal representatives, successors and
assigns except that Guarantor may not assign or transfer its obligation
hereunder without the prior written consent of Shareholders holding a majority
of the outstanding Shares.
All capitalized terms which are used but not defined herein shall have
the same meanings attributed to them under the Agreement.
LASON, INC.,
a Delaware corporation
By:
-----------------------------------
William J. Rauwerdink
Its: Executive Vice President
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