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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 3, 1996
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Wang Laboratories, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-5677 04-2192707
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(Commission File Number) (IRS Employer Identification No.)
600 Technology Park Drive, Billerica, Massachusetts 01821
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 967-5000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On May 3, 1996 Wang Laboratories, Inc. (the "Company") completed the
acquisition pursuant to the Stock Purchase Agreement (the
"Acquisition Agreement") among the Company, Dataserv Inc.
("Dataserv") and Dataserv Computer Maintenance, Inc. ("DCMI") dated
as of April 9, 1996 of all the outstanding shares of DCMI from
Dataserv. In consideration for the shares of DCMI the Company paid
Dataserv $28.5 million dollars in cash. The primary source of cash
for the purchase price was the Company's normal operations. The
acquisition will be accounted for according to purchase accounting
principles.
The foregoing is a brief summary of certain provisions of the
Acquisition Agreement, a copy of which is filed as an exhibit hereto.
This summary is qualified in its entirety by, and is subject to, the
more complete information set forth in the Acquisition Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial Statements of Business Acquired
It is not practicable to provide the required financial
statements of DCMI at the time of the filing of this Report.
Accordingly, such financial statements will be filed by an
amendment to this Report, as soon as practicable, but no later
than July 2, 1996.
(b) Pro forma Financial Information
It is not practicable to provide the required pro forma
financial information at the time of the filing of this Report.
Accordingly, such pro forma financial information will be filed
by an amendment to this Report, as soon as practicable, but no
later than July 2, 1996.
(c) Exhibits
Asset and Stock Purchase Agreement Among Wang Laboratories, Inc.,
Dataserv, Inc. and Dataserv Computer Maintenance, Inc. dated as
of April 9, 1996.
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SIGNATURES
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.
WANG LABORATORIES, INC.
Dated: May 10, 1996 By: /s/ Albert A. Notini
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Albert A. Notini
Senior Vice President,
General Counsel and
Corporate Secretary
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EXHIBIT INDEX
Exhibit No. Description Page No.
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1 Stock Purchase Agreement
Among Wang, DCMI and
Dataserv, Inc. dated
April 9, 1996
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STOCK PURCHASE AGREEMENT
among
DATASERV COMPUTER MAINTENANCE, INC.,
DATASERV, INC.
and
WANG LABORATORIES, INC.
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TABLE OF CONTENTS
Section Page
1. Purchase and Sale of the Shares......................... 1
1.01 Purchase of the Shares from the
Stockholder...................................... 1
1.02 Base Purchase Price for the Shares............... 1
1.03 Post Closing Adjustments......................... 2
1.04 Payments on Account of Adjustments............... 4
1.05 Closing.......................................... 4
2. Representations of the Stockholder
Regarding the Shares.................................... 5
3. Representations of the Stockholder and the
Company Regarding the Company........................... 5
3.01 Organization .................................... 5
3.02 Capitalization of the Company.................... 6
3.03 No Subsidiaries.................................. 6
3.04 Authorization.................................... 6
3.05 Financial Statements............................. 7
3.06 Absence of Undisclosed Liabilities............... 8
3.07 Litigation....................................... 8
3.08 Accounts Receivable.............................. 9
3.09 Spare Parts Inventory............................ 9
3.10 Personal Property................................ 10
3.11 Intentionally Omitted............................ 11
3.12 Leases........................................... 11
3.13 Intellectual Property............................ 11
3.14 Property of Third Parties for Use in Repair
or other Customer Commitments.................... 14
3.15 Tax Matters...................................... 14
3.16 Books and Records................................ 17
3.17 Contracts and Commitments........................ 17
3.18 Consents of Third Parties........................ 19
3.19 Compliance with Agreements and Laws.............. 19
3.20 Environmental Matters............................ 20
3.21 Employee Relations............................... 22
3.22 Employee Benefit Plans........................... 23
3.23 Necessary Properties and Assets.................. 27
3.24 Insurance........................................ 27
3.25 Absence of Certain Changes or Events............. 27
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3.26 Customers........................................ 29
3.27 Suppliers........................................ 29
3.28 Warranty and Product Liability Claims............ 29
3.29 Indebtedness to and from Officers,
Directors and Stockholders....................... 29
3.30 Banking Facilities............................... 30
3.31 Powers of Attorney and Suretyships............... 30
3.32 Conflicts of Interest............................ 30
3.33 Regulatory Approvals............................. 30
3.34 Disclosure....................................... 30
4. Representations of the Buyer............................ 31
4.01 Organization and Authority....................... 31
4.02 Authorization.................................... 31
4.03 Consents of Third Parties........................ 32
4.04 Regulatory Approvals............................. 32
4.05 Disclosure....................................... 32
4.06 Investment Representation........................ 32
4.07 Financing Commitment............................. 32
5. Access to Information; Public Announcements............. 32
5.01 Access to Management, Properties and
Records.......................................... 32
5.02 Public Announcements............................. 33
5.03 Memorandum; Disclaimer of Projections............ 33
6. Pre-Closing Covenants of the Stockholder and
the Company............................................. 34
6.01 Conduct of Business.............................. 34
6.02 Absence of Material Changes...................... 35
6.03 Delivery of Interim Financial Statements......... 36
6.04 Communications with Customers and Suppliers...... 36
6.05 Compliance with Laws............................. 36
6.06 Continued Truth of Representations and
Warranties....................................... 36
6.07 Continuing Obligation to Inform.................. 37
6.08 Exclusive Dealing................................ 37
6.09 Capital Contribution............................. 37
6.10 Assignment of Assets and Liabilities
of Dataserv Mexico............................... 38
6.11 HSR Act Notification............................. 38
6.12 Chanhassen Property.............................. 38
6.13 Assignment and Assumption of Litigation Rights,
Titles, Interests and Obligations................ 38
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7. Best Efforts to Obtain Satisfaction of Conditions....... 38
8. Conditions to Obligations of the Buyer.................. 39
8.01 Continued Truth of Representations and
Warranties of the Stockholder and the
Company; Compliance with Covenants and
Obligations...................................... 39
8.02 Performance by the Stockholder and the
Company.......................................... 39
8.03 Absence of Material Adverse Change............... 39
8.04 HSR Act.......................................... 39
8.05 Consent of Third Parties......................... 39
8.06 Adverse Proceedings.............................. 40
8.07 Opinion of Counsel............................... 40
8.08 Chanhassen Lease................................. 40
8.09 Guaranty......................................... 40
8.10 Acknowledgment Letter............................ 40
8.11 Closing Deliveries............................... 40
9. Conditions to Obligations of the Stockholder............ 41
9.01 Continued Truth of Representations and
Warranties of the Buyer; Compliance with
Covenants and Obligations........................ 41
9.02 Performance by the Buyer......................... 42
9.03 Corporate Proceedings............................ 42
9.04 HSR Act.......................................... 42
9.05 Consents of Third Parties........................ 42
9.06 Opinion of Counsel............................... 42
9.07 Closing Deliveries............................... 42
10. Indemnification......................................... 43
10.01 By the Stockholder............................... 43
10.02 By the Buyer..................................... 44
10.03 Claims for Indemnification....................... 44
10.04 Defense by the Indemnifying Party................ 45
10.05 Payment of Indemnification Obligation............ 46
10.06 Survival of Representations and Agreements;
Claims for Indemnification....................... 46
10.07 Limitations...................................... 47
10.08 Exclusive Remedy................................. 48
10.09 Cure............................................. 49
10.10 Recoveries....................................... 49
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11. Post-Closing Agreements................................. 49
11.01 Confidentiality.................................. 49
11.02 No Solicitation or Hiring of Former
Employees........................................ 52
11.03 Deferred Compensation............................ 52
11.04 Use of BellSouth Marks and Names................. 52
11.05 Non-Competition Agreement........................ 53
11.06 Certain Accounting Matters....................... 55
12. Certain U.S. Tax Matters................................ 56
13. Termination of Agreement; Option to Proceed;
Damages................................................. 61
13.01 Termination by Lapse of Time..................... 61
13.02 Termination by Agreement of the Parties.......... 61
13.03 Termination by Reason of Breach.................. 61
13.04 Earnest Money.................................... 62
13.05 Availability of Remedies at Law.................. 62
14. Brokers................................................. 62
14.01 For the Stockholder and the Company and
the Subsidiaries................................. 62
14.02 For the Buyer.................................... 62
15. Notices................................................. 63
16. Successors and Assigns.................................. 64
17. Entire Agreement; Amendments; Attachments............... 64
18. Severability............................................ 64
19. Investigation of the Parties............................ 64
20. Expenses................................................ 65
21. Further Assurances...................................... 65
22. Governing Law........................................... 65
23. Section Headings........................................ 65
24. Counterparts............................................ 65
25. Definitions............................................. 66
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Schedules to be provided by the Stockholder and the Company
3.04 - Authorization
3.05 - Financial Statements
3.06 - Absence of Undisclosed Liabilities
3.07 - Litigation
3.08 - Accounts Receivable
3.09 - Inventory
3.12 - Leases
3.13(a)(i) - Abandoned or Assigned Intellectual Property
3.13(a)(ii) - Intellectual Property
3.13(c) - License Agreements
3.13(d) - Indemnification
3.13(e) - Software License Agreements
3.13(f) - Software License Agreement Exceptions
3.15(a) - Tax Matters
3.15(d) - Tax Elections
3.15(e) - Deferred Inter-Company Transactions
3.15(f) - Penalties/Fines
3.16 - Ledgers
3.17(a)(i) - Loan Agreements
3.17(a)(ii) - Personal Property; Security Agreements
3.17(a)(iii) - Significant Customer Contracts
3.17(a)(iv) - Labor Agreements, Employment Agreements and
Confidentiality Agreements
3.17(a)(v) - Agency Agreements
3.17(a)(vi) - Affiliated Agreements
3.17(a)(vii) - Agreements for Disposal of Waste
3.17(a)(viii) - Other Material Agreements
3.17(b)(ii) - Company Material Defaults
3.17(b)(iii) - Third Party Material Defaults
3.17(b)(iv) - Losses
3.17(b)(v) - Supplies
3.18 - Consents of Third Parties
3.19 - Compliance with Laws
3.20(a) - Environmental
3.20(b) - Releases
3.20(f) - Material Environmental Reports
3.21(a) - Employee Relations Compliance
3.21(b) - Employee Relations
3.22(a) - Employee Benefit Plans
3.22(c) - Qualification of Employee Benefit Plans
3.22(i) - VEBA
3.22(k) - Officer, Director and Key Employee Agreements
3.24 - Insurance
3.25 - Absence of Changes
3.26 - Significant Customers
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3.27 - Suppliers
3.30 - Banking Facilities
6.10 - Dataserv Mexico
8.05 - Consent of Third Parties
10.01(e) - Asset Transactions
11.05(d)(ii) - Stockholder Customers
12.16 - Tax Audits
Schedules to be provided by the Buyer
1.03(a) - Initial Closing Statement
4.03 - Consents of Third Parties
6.12 - Terms of Chanhassen Lease
11.05(d)(i) - Customers Receiving Company
Services from the Company
Exhibits
A - Opinion of Stockholder's, Company's and
Guarantor's Counsel
B - Guaranty
C - Opinion of Buyer's Counsel
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STOCK PURCHASE AGREEMENT
Agreement (the "Agreement") made as of the 9th day of April 1996
by and among Wang Laboratories, Inc., a Delaware corporation (the
"Buyer"), Dataserv Computer Maintenance, Inc., a Minnesota corporation
(the "Company"), and Dataserv, Inc., a Minnesota corporation (the
"Stockholder"), which owns all of the issued and outstanding capital
stock of the Company.
Preliminary Statement
1. The Stockholder owns 1,000 issued and outstanding shares
(collectively, the "Shares") of the common stock, $1.00 stated value
per share (the "Common Stock"), of the Company, which Shares represent
all of the issued and outstanding shares of capital stock of the
Company.
2. The Buyer desires to purchase, and the Stockholder desires to
sell, the Shares for the consideration set forth below, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereby agree as
follows:
1. Purchase and Sale of the Shares
1.01 Purchase of the Shares from the Stockholder. Subject to
and upon the terms and conditions of this Agreement, at the closing of
the transactions contemplated by this Agreement (the "Closing"), the
Stockholder shall sell, transfer, convey, assign and deliver to the
Buyer, and the Buyer shall purchase, acquire and accept from the
Stockholder, all the Shares owned by the Stockholder. At the Closing
the Stockholder shall deliver to the Buyer certificates evidencing the
Shares owned by the Stockholder duly endorsed in blank or with stock
powers duly executed by such Stockholder.
1.02 Base Purchase Price for the Shares.
(a) The purchase price to be paid by the Buyer for the
Shares shall be Twenty-Eight Million Five Hundred Thousand Dollars
($28,500,000) (the "Base Purchase Price"), subject to adjustment
pursuant to Subsections 1.03 and 1.04 hereof. The Base Purchase Price
shall be payable in the manner described in paragraphs (b) and (c) of
this Subsection 1.02.
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(b) On February 26, 1996, the Buyer delivered to the
Seller the sum of Two Million Dollars ($2,000,000) as an earnest money
deposit to be credited against the Base Purchase Price (the "Earnest
Money").
(c) At the Closing, the Buyer shall deliver to the
Stockholder, the sum of Twenty-Six Million Five Hundred Thousand
Dollars ($26,500,000) in cash, by cashier's or certified check, or by
wire transfer of immediately available funds to an account designated
by the Stockholder.
1.03 Post Closing Adjustments. The Base Purchase Price set
forth in Subsection 1.02 hereof shall be subject to adjustment after
the date of the Closing (the "Closing Date") as follows:
(a) As promptly as possible following the Closing
Date, and in any event within 45 days of the Closing Date, (i) the
Company shall prepare an initial closing statement of the Company as of
the Closing in the form of Schedule 1.03(a) attached hereto (the
"Initial Closing Statement") and deliver it to Coopers & Lybrand,
L.L.P., independent public accountants for the Stockholder (the
"Stockholder's Auditors"), and (ii) the Stockholder shall cause the
Stockholder's Auditors to conduct an audit of the books and records of
the Company as of the Closing Date. Not later than 45 days after
delivery of the Initial Closing Statement, the Stockholder shall cause
the Stockholder's Auditors to deliver the Initial Closing Statement, as
adjusted by them, if at all (such adjusted Initial Closing Statement,
as it may be further adjusted pursuant to Subsection 1.03(c) hereof,
the "Closing Statement"), to each of the parties to this Agreement. The
Stockholder's Auditors shall have full access to the books, records,
properties and personnel of the Company for purposes of auditing the
books and records and adjusting, if necessary, the Initial Closing
Statement. The Closing Statement shall be prepared in accordance with
generally accepted accounting principles applied consistently with the
Company's past practice (to the extent that such past practice was in
accordance with generally accepted accounting principles), without any
adjustments applicable solely as a result of the acquisition of the
Shares by the Buyer on the Closing Date, and shall be accompanied by an
unqualified opinion thereon by the Stockholders's Auditors.
(b) Ernst & Young, L.L.P., the independent public
accountants for the Buyer (the "Buyer's Auditors"), shall have the
right to review the work papers of the Stockholder's Auditors utilized
in preparing their audit of the Closing Statement, and shall have full
access to the books, records, properties and personnel of the Company
for purposes of verifying the accuracy and fairness of the presentation
of the Closing
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Statement. The Buyer and the Company shall work in good faith and
cooperate with the Stockholder and the Stockholder's Auditors in the
preparation and audit of the Closing Statement and the resolution of
any dispute in connection therewith pursuant to paragraph (c) below.
(c) The values or amounts for each item reflected on
the Closing Statement shall be binding upon the Buyer, unless the Buyer
gives written notice within 45 days after receipt of the Closing
Statement, of disagreement with any of the values or amounts shown on
the Closing Statement, specifying as to each such item in reasonable
detail, the nature and extent of such disagreement (the "Dispute
Notice"). If the Buyer and the Stockholder are unable to resolve any
such disagreement within 45 days after the date of the Dispute Notice,
the disagreement shall be submitted for resolution to a single
arbitrator, then an active certified public accountant who or which is
mutually agreeable to the Buyer's Auditors and the Stockholder's
Auditors (the "Neutral Auditor"), in accordance with the Commercial
Rules of Arbitration of the American Arbitration Association then in
effect at the office of the American Arbitration Association in Boston,
Massachusetts. The parties shall direct the Neutral Auditor to resolve
any dispute as soon as reasonably practicable, but in any event, no
later than 30 days after the engagement of the Neutral Auditor. The
decision of the Neutral Auditor shall be binding upon the parties
hereto. If as a result of the resolution of any disputes pursuant to
this Subsection 1.03 any amount shown in the Closing Statement is
determined to be erroneous, such erroneous amount shall be deleted from
the Closing Statement and the correct amount shall be inserted in lieu
thereof. The Closing Statement, as so corrected, shall constitute the
Closing Statement for purposes of this Agreement.
(d) The fees and disbursements of (i) the
Stockholder's Auditors incurred in the preparation of the Closing
Statement shall be paid by the Stockholder, and (ii) the Buyer's
Auditors incurred in the review of the Closing Statement shall be paid
by the Buyer. The Buyer and the Stockholder shall each pay fifty
percent (50%) of the fees and disbursements of the Neutral Auditor.
(e) On the first business day after the expiration of
the 45-day period for giving the Dispute Notice, if no Dispute Notice
is given, or immediately upon the resolution of disputes, if any,
pursuant to this Subsection 1.03, the Base Purchase Price shall be
adjusted as follows (as so adjusted, the "Adjusted Purchase Price"):
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(i) If the Net Working Capital of the
Company (as such term is defined below) on the Closing Date, as
reflected on the Closing Statement, is less or greater than $1,472,000,
the deficiency or excess, if any, shall be deducted from or added to,
as the case may be, the Base Purchase Price to obtain the Adjusted
Purchase Price.
(ii) The term "Net Working Capital of the
Company" is defined as the amount of "Total Selected Assets Less Total
Selected Liabilities" of the Company as shown on the Closing Statement
and prepared in accordance with Subsection 1.03(a) hereof.
1.04 Payments on Account of Adjustments.
(a) The difference between the Adjusted Purchase Price
and the Base Purchase Price, together with interest thereon at the rate
of 5% per annum from the Closing Date to the payment of such deficiency
or excess, if any, shall be paid to the Buyer or the Stockholder, as
the case may be, within five (5) business days after (i) the expiration
of the 45-day period for giving the Dispute Notice, if no Dispute
Notice is given, or (ii) final resolution of any dispute in connection
with the determination of the Closing Statement.
(b) If an amount is payable to the Buyer pursuant to
paragraph (a) of this Subsection 1.04, such amount shall be paid to the
Buyer directly by the Stockholder, in cash, by wire transfer of
immediately available funds to an account designated by the Buyer.
(c) If an amount is payable to the Stockholder
pursuant to paragraph (a) of this Subsection 1.04, such amount shall be
paid to the Stockholder directly by the Buyer, in cash, by wire
transfer of immediately available funds to an account designated by the
Stockholder.
1.05 Closing. The Closing shall take place at the offices of
Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, at 10:00
a.m., Boston time, not less than three nor more than fifteen business
days after the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have
expired or been terminated, or at such other place, time or date as may
be mutually agreed upon in writing by the parties. The transfer of the
Shares by the Stockholder to the Buyer shall be deemed to occur at 9:00
a.m., Boston time, on the Closing Date.
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2. Representations of the Stockholder Regarding the Shares
The Stockholder represents and warrants to the Buyer as
follows:
(a) The Stockholder has good and marketable title to
the Shares (although no representation or warranty is made as to
whether a market for such Shares exists) which are to be transferred to
the Buyer by the Stockholder pursuant hereto, free and clear of any and
all covenants, conditions, restrictions, voting trust arrangements,
liens, charges, encumbrances, options and adverse claims or rights
whatsoever.
(b) The Stockholder has the necessary corporate power
and authority to enter into this Agreement and to transfer, convey and
sell to the Buyer at the Closing the Shares to be sold by the
Stockholder hereunder and, upon consummation of the purchase
contemplated hereby, the Stockholder will transfer to the Buyer good
and marketable title to such Shares (although no representation or
warranty is made as to whether a market for such Shares exists), free
and clear of all covenants, conditions, restrictions, voting trust
arrangements, liens, charges, encumbrances, options and adverse claims
or rights whatsoever.
(c) The Stockholder is not a party to, subject to or
bound by any agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body which
would prevent the execution or delivery of this Agreement by the
Stockholder or the transfer, conveyance and sale of the Shares to be
sold by the Stockholder to the Buyer pursuant to the terms hereof.
3. Representations of the Stockholder and the Company
Regarding the Company
Except as specifically set forth on the schedules attached hereto
(the "Disclosure Schedule"), the Stockholder and the Company, jointly
and severally, represent and warrant to the Buyer that:
3.01 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota, and has all necessary corporate power and authority
to own its properties, to carry on its business as now being conducted,
to execute and deliver this Agreement and the agreements contemplated
herein, and to consummate the transactions contemplated hereby and
thereby. The Company is duly qualified to do business and in good
standing in all jurisdictions in which its ownership of property or the
character of its business requires such qualification, except where the
failure to so qualify would
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not have a Material Adverse Effect (as defined in Section 25 hereof).
True, correct and complete copies of the Articles of Incorporation and
Bylaws of the Company, as amended to date, have been previously
delivered to the Buyer, and no amendments have been made thereto or
have been authorized since the date thereof.
3.02 Capitalization of the Company.
The Company's authorized capital stock consists of
25,000 shares of Common Stock, $1.00 stated value per share, of which
1,000 shares are issued and outstanding on the date hereof and held of
record and beneficially by the Stockholder. All such issued and
outstanding shares of Common Stock have been and on the Closing Date
will be duly and validly issued and are, or will be on such date, fully
paid and non-assessable. Except pursuant to this Agreement, there are
not, and on the Closing Date there will not be, outstanding (i) any
options, warrants or other rights to purchase from the Company any
capital stock of the Company; (ii) any securities convertible into or
exchangeable for shares of such stock; or (iii) any other commitments
of any kind for the issuance of additional shares of capital stock or
options, warrants or other securities of the Company. None of the
issued and outstanding shares of Common Stock are held in the treasury
of the Company.
3.03 No Subsidiaries. There is no corporation, partnership,
joint venture or other entity in which the Company has, either directly
or indirectly, an equity interest representing 50% or more of the
capital stock thereof or other equity interest therein.
3.04 Authorization. The execution and delivery by the Company
and the Stockholder of this Agreement and the agreements provided for
herein, and the consummation by the Company and the Stockholder of all
transactions contemplated hereunder and thereunder by the Company and
the Stockholder, have been duly authorized by all requisite corporate
action on the part of each. This Agreement has been duly executed by
the Company and the Stockholder. This Agreement and all other
agreements and obligations entered into and undertaken in connection
with the transactions contemplated hereby to which the Company or the
Stockholder is a party constitute the valid and legally binding
obligations of the Company and the Stockholder, enforceable against
them in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally and general principles of equity,
regardless of whether applied in equity or at law. The execution,
delivery and performance by the Company and the Stockholder of this
Agreement and the agreements provided for
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herein, and the consummation by the Company and the Stockholder of the
transactions contemplated hereby and thereby, will not, with or without
the giving of notice or the passage of time or both, (a) assuming
compliance by the parties with the requirements of the HSR Act, violate
the provisions of any law, rule or regulation applicable to the Company
or the Stockholder; (b) violate the provisions of the Articles of
Incorporation or Bylaws of the Company or the Stockholder; (c) violate
any judgment, decree, order or award of any court, governmental body or
arbitrator; or (d) except as set forth on Schedule 3.04 attached
hereto, conflict with or result in the breach or termination of any
term or provision of, or constitute a default under, or trigger any
change in control provision, or cause any acceleration under, or cause
the creation of any lien, charge or encumbrance upon the properties or
assets of the Company pursuant to, any indenture, mortgage, deed of
trust, contract or other instrument or agreement to which the Company
is a party or by which the Company or any of its properties is or may
be bound, any of which would have a Material Adverse Effect.
3.05 Financial Statements.
(a) The Stockholder has previously delivered to
the Buyer:
(i) the audited consolidated balance
sheets of the Stockholder as of December 31, 1994 and 1995 (the
"Audited Balance Sheets") and the related statements of operations,
stockholders' equity, retained earnings and cash flows of the
Stockholder for the fiscal years then ended (collectively, the "Audited
Financial Statements");
(ii) the unaudited consolidated balance
sheet of the Stockholder as of February 29, 1996 (the "Current Balance
Sheet") and the related statement of operations of the Stockholder for
the two-month period then ended (collectively, the "Current Financial
Statements"); and
(iii) the unaudited consolidated balance sheets of
the Stockholder as of the end of each calendar month in fiscal 1995 and
the first two months of fiscal 1996 (the "Monthly Balance Sheets") and
the related statement of operations for the interim periods then ended
(the "Monthly Financial Statements").
(b) The Audited Financial Statements, the Current
Financial Statements, the Monthly Financial Statements and the interim
financial statements (the "Interim Financial Statements") to be
delivered pursuant to Subsection 6.03 hereof (collectively, the
"Financial Statements"), except as set forth on Schedule 3.05 attached
hereto, have been (or, in the case of the
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Interim Financial Statements, will be) prepared in accordance with
generally accepted accounting principles applied consistently with past
practices and, in the case of the Audited Financial Statements, are
accompanied by an unqualified opinion of the Stockholder's Auditors.
The date of the 1995 Audited Balance Sheet is hereinafter referred to
as the "Balance Sheet Date."
(c) The Financial Statements consolidate the financial
statements of the Stockholder, the Company and Dataserv Mexico, S.A. de
C.V. ("Dataserv Mexico"). The Stockholder is a holding company with no
operating revenues.
(d) The Financial Statements fairly present, in all
material respects, as of their respective dates, the consolidated
financial condition, retained earnings, assets and liabilities of the
Stockholder, the Company and Dataserv Mexico and the consolidated
results of operations of the Stockholder's, the Company's and Dataserv
Mexico's businesses for the periods indicated. The amounts shown as
accrued for current and deferred income and other taxes in the
Financial Statements are sufficient for the payment of all accrued and
unpaid federal, state and local income taxes, interest, penalties,
assessments or deficiencies applicable to the Stockholder, the Company
or Dataserv Mexico, whether disputed or not, for the applicable period
then ended and periods prior thereto.
3.06 Absence of Undisclosed Liabilities. Except as and to the
extent (a) set forth on Schedule 3.06 attached hereto, (b) reflected
and reserved against in the Audited Balance Sheet as of December 31,
1995, or (c) incurred in the ordinary course of business after the date
of the Audited Balance Sheet as of December 31, 1995 and not material
in amount, either individually or in the aggregate, the Company has no
liability or obligation, secured or unsecured, whether accrued,
absolute, contingent, unasserted or otherwise, which is material to the
business as a going concern, properties, assets or financial condition
of the Company. For purposes of this Subsection 3.06, "material" means
any amount in excess of $250,000 individually or $500,000 in the
aggregate.
3.07 Litigation. Except as set forth on Schedule 3.07
attached hereto, (a) there is no action, suit or proceeding to which
the Company is a party (either as a plaintiff or defendant) pending or,
to the knowledge of the Stockholder or the Company, after reasonable
inquiry, threatened before any court or governmental agency, authority,
body or arbitrator which, if decided adversely to the Company, would
have a Material Adverse Effect; (b) to the knowledge of the Stockholder
or the Company, after reasonable inquiry, there is no reasonable basis
for any such action, suit or proceeding, including without limitation,
any
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matters relating to alleged wrongful or discriminatory termination of
employees which, if decided adversely to the Company, would have a
Material Adverse Effect; (c) neither the Company, nor, to the knowledge
of the Stockholder or the Company, after reasonable inquiry, any
officer, director or key employee of the Company, has been permanently
or temporarily enjoined by any order, judgment or decree of any court
or any governmental agency, authority or body from engaging in or
continuing any conduct or practice in connection with the business,
assets or properties of the Company; and (d) there is not in existence
on the date hereof any order, judgment or decree of any court, tribunal
or agency enjoining or requiring the Company to take any action of any
kind with respect to its business, assets or properties which would
have a Material Adverse Effect. Each action, suit, proceeding or matter
listed on Schedule 3.07 exclusively arises from and/or relates to the
Company's operations as they currently are or previously were conducted
by the Company or the Stockholder and hereunder are being acquired.
3.08 Accounts Receivable. Except as set forth on Schedule
3.08 attached hereto, all accounts and notes receivable of the Company
reflected in the Current Balance Sheet (the "Accounts Receivable")
arose out of the sales of Field Spare Parts, Inventory and Consumables
(as defined in Subsection 3.09 hereof) or services in the ordinary
course of business.
3.09 Spare Parts Inventory.
(a) The Company conducted an accurate physical
inventory audited by the Stockholder's Auditors dated as of September
1995 (the "September Inventory") of the Company's spare parts field
inventory and field consumables. The field spare parts inventory (the
"Field Spare Parts") consists of repairable parts used to provide
Maintenance Services (as defined in Subsection 11.05(f)(v) hereof). The
Field Spare Parts are located (i) in part sheds, (ii) at customer
sites, (iii) in the possession of customer engineers, (iv) at certain
branch offices and (v) in disposition areas at Bloomington and
Chanhassen, Minnesota. The Field Spare Parts located at Bloomington and
Chanhassen are suspected malfunctioning parts awaiting repair or other
disposition. The field consumables (the "Consumables") consist of parts
used in the field to provide Maintenance Services on customer equipment
that is not repairable, or for which no repair source presently exists.
Consumables are located in all of the sites that Field Spare Parts are
located. Except as set forth on Schedule 3.09 attached hereto, the
Field Spare Parts and Consumables generally consist of items of a
quality and quantity which are reasonably expected to be usable in the
ordinary course of the business presently conducted by the Company.
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(b) The Company maintains a perpetual inventory system
for Field Spare Parts and Consumables maintained at warehouses or
logistics centers which were not subject of the September Inventory
(the "Inventory"). This Inventory generally consists of items of a
quality and quantity which are reasonably expected to be usable in the
ordinary course of the business presently conducted by the Company. The
Inventory is continuously cycle counted in accordance with standard
inventory control policy of the Company to ensure that the perpetual
inventory system records are consistent with a physical count. The
perpetual system records accurately reflect the physical count of such
Inventory of the Company in all material respects.
(c) The values of the Field Spare Parts and Inventory
reflected on the December 1995 audited financial statements were
determined in accordance with the September Inventory and the Company's
perpetual inventory records and are set forth in accordance with
generally accepted accounting principles applied consistently with past
practices.
(d) Between the September Inventory and December 31,
1995, no material changes in the business or the business operations of
the Company have occurred which would have caused a material inaccuracy
in the September Inventory or the perpetual inventory records.
(e) Between December 31, 1995 and the Closing Date, no
material changes in the business or the business operations, either
intended or unintended, of the Company have occurred which would have
caused a material inaccuracy in the September Inventory or the
perpetual inventory records.
3.10 Personal Property. The Company owns or leases all
material items of tangible personal property (including, without
limitation, machinery, equipment, furniture and fixtures) (the
"Personal Property") necessary for the conduct of its business as
presently conducted, including, without limitation, all of the Personal
Property reflected on the Current Balance Sheet (except for Personal
Property sold or disposed of since the date of the Current Balance
Sheet in the ordinary course of business). The Company has previously
delivered to the Buyer a true, correct and complete copy of the fixed
asset register of the Company. Each such item of Personal Property
owned by the Company is free and clear of any liens, other than any
Security Interest (as defined below). For purposes of this Agreement,
"Security Interest" shall mean (i) mechanic's, materialmen's and
similar liens, (ii) liens for taxes not yet due and payable or for
taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (iii) liens arising under worker's compensation,
unemployment insurance, social security, retirement and similar
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<PAGE> 18
legislation, (iv) purchase money security interests and (v) other
incidental liens that do not materially detract from the value of, or
materially interfere with the use of, the Personal Property subject
thereto. Each material item of Personal Property owned or leased by the
Company is free from material defects, has been maintained in
accordance with normal industry practice, and is in good operating
condition and repair (normal wear and tear excepted).
3.11 INTENTIONALLY OMITTED
3.12 Leases. Schedule 3.12 attached hereto sets forth a true,
correct and complete list as of the date hereof of all leases and
subleases, including all amendments, modifications and supplemental
agreements relating thereto, of real property for office space, service
centers and warehouses (specifically excluding storage sheds),
identifying separately each ground lease, to which the Company is a
party (collectively, the "Leases"). The Leases are in full force and
effect, are binding and enforceable against the Company and, to the
knowledge of the Stockholder or the Company, the other parties thereto,
in accordance with their respective terms and, except as set forth on
Schedule 3.12, have not been modified, assigned or amended since the
date of delivery to the Buyer. Since January 1, 1995, no party to any
Lease has sent written notice to the other claiming that such party is
in material default thereunder and that such default remains uncured
and no portion of any security deposit specified in any Lease has been
drawn upon. Except as set forth on Schedule 3.12, there has not
occurred any event, to the knowledge of the Stockholder or the Company,
which would constitute a breach of or default in the performance of any
covenant, agreement or condition contained in any Lease that would have
a Material Adverse Effect, nor has there occurred any event which with
the passage of time or the giving of notice or both would constitute
such a breach or material default that would have a Material Adverse
Effect. The Company is not obligated to pay any leasing or brokerage
commission relating to any Lease and, except as set forth on Schedule
3.12, will not have any obligation under any agreement or arrangement
to which the Company is a party to pay any leasing or brokerage
commission upon the renewal of any Lease. The Company does not occupy
any real estate except by virtue of ownership or a lease, sublease or
license thereof.
3.13 Intellectual Property.
(a) The Company owns or has the right to use all Intellectual
Property (as defined below) used in the operation of the Company's
business or reasonably necessary for the operation of the Company's
business as presently conducted. The Intellectual Property owned by the
Company is not subject to any
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<PAGE> 19
outstanding judgment, order, decree, stipulation, injunction, lien,
security interest or other encumbrance. Except as set forth on Schedule
3.13(a)(i) attached hereto, each item of Intellectual Property owned by
or used in the operation of the business of the Company at any time
since January 1, 1995 will be owned or available for use by the Company
on substantially similar terms and conditions immediately following the
Closing. The Company has taken commercially reasonable steps necessary
to protect the proprietary nature of each item of Intellectual
Property. No other person or entity has any rights to any of the
Intellectual Property owned by the Company (except pursuant to Customer
Agreements (as defined in Subsection 3.13(c) hereof), or to agreements
or licenses specified in Schedule 3.13(c)). To the knowledge of the
Stockholder or the Company, after reasonable inquiry, no other person
or entity is infringing, violating or misappropriating any of the
Intellectual Property that the Company owns or uses. For purposes of
this Agreement, the term "Intellectual Property" means all (i) patents,
patent applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, reexamination, utility,
model, certificate of invention and design patents, registrations and
applications for registrations, (ii) trademarks, service marks, trade
dress, logos, trade names and corporate names and registrations and
applications for registration thereof, (iii) copyrights and
registrations and applications for registration thereof, (iv) computer
software, data and documentation, (v) trade secrets and confidential
business information, whether patentable or unpatentable and whether or
not reduced to practice, know-how, manufacturing and production
processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing
and cost information, business and marketing plans and customer and
supplier lists and information, (vi) other proprietary rights relating
to any of the foregoing and (vii) copies and tangible embodiments
thereof. Schedule 3.13(a)(ii) attached hereto sets forth a true,
correct and complete list of all material Intellectual Property owned
by the Company and described in clauses (i) and (ii) of the preceding
sentence, along with all copyright registrations and computer software
developed by the Company which is used by the Company for major
transactions and information systems used by the Company in delivering
maintenance or repair services. Notwithstanding the foregoing,
Intellectual Property does not include any trademarks, service marks,
trade dress, logos, tradenames and corporate names and registrations
and applications for registrations thereof in any country other than
the United States and Mexico, whether listed on Schedule 3.13(a)(ii) or
not.
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<PAGE> 20
(b) To the knowledge of the Stockholder or the Company, after
reasonable inquiry, but not including patent infringement clearance
searches, none of the activities or business presently conducted by the
Company or any Subsidiary, or conducted by the Company at any time
within the six years prior to the date of this Agreement, infringes or
violates, or constitutes a misappropriation of, any Intellectual
Property rights of any other person or entity, other than any such
infringement, violation or misappropriation which would not have a
Material Adverse Effect. Neither the Company nor the Stockholder has
received, at any time within the six years prior to the date of this
Agreement, any written complaint, claim or notice alleging any
outstanding or unresolved infringement, violation or misappropriation.
(c) Schedule 3.13(c) attached hereto identifies each license
or other agreement pursuant to which the Company has granted any rights
to any third party with respect to any of its Intellectual Property,
except pursuant to agreements (including supplements) entered into in
the ordinary course of the Company's business between the Company and
an end-user for the provision of goods or services (the "Customer
Agreements").
(d) Except as set forth on Schedule 3.13(d) attached hereto,
and pursuant to the Contracts listed on Schedules 3.17(a)(i) through
(viii) attached hereto and the Customer Agreements, the Company has not
agreed to indemnify any person or entity for or against any
infringement, misappropriation or other conflict with respect to any
item of Intellectual Property that the Company owns or uses.
(e) Schedule 3.13(e) attached hereto identifies each material
license, sublicense or other agreement pursuant to which the Company
uses material items of Intellectual Property that are owned by a party
other than the Company and are reasonably necessary to conduct the
business as presently conducted.
(f) Except as set forth in Schedule 3.13(f), with respect to
each such material item of Intellectual Property identified on Schedule
3.13(e):
(i) the license, sublicense or other agreement, covering
such item is a valid and binding agreement of the Company, enforceable
in accordance with its terms;
(ii) such license, sublicense or other agreement will
continue to be valid and binding, enforceable in accordance with its
terms, immediately following the Closing as in effect prior to the
Closing;
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<PAGE> 21
(iii) neither the Company nor, to the knowledge of the
Stockholder or the Company, any other party to such license, sublicense
or other agreement is in material breach or default, and no event has
occurred which with the passage of time or giving notice or both would
constitute a material breach or default, result in a loss of material
rights or result in the creation of any material lien, charge or
encumbrance thereunder or pursuant thereto or permit termination,
material modification or acceleration thereunder; and
(iv) to the knowledge of the Stockholder or the Company,
the underlying item of Intellectual Property is not subject to any
outstanding judgment, order, decree, stipulation or injunction.
3.14 Property of Third Parties for Use in Repair or other
Customer Commitments. The personal property (including, without
limitation, inventory, spare parts, equipment and software programs)
owned or leased by third parties maintained or stored at any of the
offices of the Company which are used to provide services to customers
of the Company has been maintained such that upon the return of such
property to its owner or lessor, in its present condition, there will
be no material difference in the quality and quantity of property
returned to its owner or lessor when reconciled with the records of the
owner or lessor. For purposes of this Subsection 3.14, "material
difference" shall mean a deficiency of more than ten percent (10%) in
the value/amount of such property per owner or lessor.
3.15 Tax Matters.
(a) Except as set forth on Schedule 3.15(a) attached hereto,
the Company has filed in a timely manner (including permitted
extensions) all Tax Returns (as defined below) that it was required to
file and all such Tax Returns were correct and complete in all material
respects. The Company has timely paid all Taxes (as defined below) that
are shown to be due on any such Tax Returns. The accruals and reserves
for Taxes set forth on the Current Balance Sheet and Closing Statement
and described on Schedule 3.15(a) (excluding any assets, accruals and
reserves for deferred Taxes established to reflect timing differences
between book and Tax income) are, or will be, sufficient to pay all
unpaid Taxes attributable (on an accrual basis) to all periods ended
(or deemed pursuant to Subsection 12.11 to end) on or before the date
of the Current Balance Sheet or the Closing Statement, as the case may
be. The Company has no actual or potential liability for any Tax
obligation of any taxpayer (including without limitation any affiliated
group of corporations or other entities that included the Company (a
"Consolidated Group") during a prior period) other than the Company.
Except as set forth on Schedule 3.15(a), all
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<PAGE> 22
Taxes that the Company is or was required by law to withhold or collect
have been duly withheld or collected and, to the extent required, have
been paid to the proper federal, state, foreign or local court,
arbitrational tribunal, administrative agency or commission or other
governmental or regulatory body, authority or agency (a "Governmental
Entity"). There are no liens for Taxes on the assets of the Company.
For purposes of this Agreement, the term "Taxes" means all taxes,
including without limitation net income, gross income, profits income,
lease, service, service use, severance, stamp, occupation, windfall
profits, customs duties, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, payroll and franchise taxes imposed
by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of
the United States or any such government, and any interest, fines,
penalties, assessments or additions to tax resulting from, attributable
to or incurred in connection with any tax or any contest or dispute
thereof. For purposes of this Agreement, the term "Tax Returns" means
all reports, returns, declarations, statements or other information
required to be supplied to a taxing authority in connection with Taxes.
(b) The Stockholder has delivered to the Buyer correct and
complete copies of all federal income Tax Returns, examination reports
and statements of deficiencies assessed against or agreed to by the
Company for the taxable years ended December 31, 1992 through December
31, 1994 and will deliver such items for the taxable year ending on
December 31, 1995 when such returns are filed and as it receives such
reports and statements. The federal income Tax Returns of the Company
have been audited by the Internal Revenue Service for all taxable years
through December 31, 1991 and the agreed upon deficiencies resulting
from such audit relating to the Company have been or will be paid by
the Company. Except as set forth on Schedule 12.16 attached hereto, no
examination or audit of any Tax Returns of the Company by any
Governmental Entity is currently in progress or, to the knowledge of
the Stockholder or the Company, threatened or contemplated.
(c) The Company is not a "consenting corporation" within the
meaning of Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), and none of the assets of the Company is subject
to an election under Section 341(f) of the Code. The Company has not
been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(l)(A)(ii) of the Code. Except for the
BellSouth Corporation Consolidated Federal Income Tax Allocation
Policy, the Company is not a party to or bound by any Tax allocation,
Tax
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<PAGE> 23
indemnity or Tax-sharing agreement. Except as set forth in Schedule
3.15(a), the Company has not waived any statute of limitations in the
jurisdiction of any taxing authority with respect to Taxes or agreed to
an extension of time with respect to a Tax assessment or deficiency.
(d) All separate written elections with respect to Taxes as
of the date hereof are set forth in Schedule 3.15(d) attached hereto.
None of the assets of the Company is property that the Company is
required to treat as being owned by any other person pursuant to the
"safe harbor lease" provisions of the former Section 168(f)(8) of the
Code. None of the assets of the Company directly or indirectly secures
any debt the interest of which is tax exempt under Section 103(a) of
the Code. None of the assets of the Company is "tax exempt use
property" within the meaning of Section 168(h) of the Code. The Company
has not agreed to make and is not required to make any adjustment under
Section 481 of the Code by reason of a change in accounting method or
otherwise. The Company has not participated in or cooperated with, and
will not participate in or cooperate with, an international boycott
within the meaning of Section 999 of the Code nor has the Company had
operations which are or may hereafter become reportable under Section
999 of the Code. Except for operations in Guam and Puerto Rico, the
Company does not have, and has not had, a permanent establishment in
any foreign country, as defined in any applicable treaty or convention
between the United States and such foreign country. The Company is not
a party to any joint venture, partnership or other arrangement or
contract that is or should be treated as a partnership for federal
income tax purposes.
(e) With the exception of the group of which only the
Stockholder and one or more of its subsidiaries were members, neither
the Stockholder, the Company nor any of their subsidiaries is or has
ever been a member of an "affiliated group" of corporations (within the
meaning of Section 1504 of the Code), other than a group of which the
Stockholder is presently a member. Except as set forth on Schedule
3.15(e) attached hereto, the Company has not engaged in any transaction
with any member of an "affiliated group" of corporations of which the
Company is a member which would be accounted for as a "deferred
intercompany transaction" within the meaning of Treasury Regulation
Section 1.1502-13, except to the extent gain from any such transaction,
when aggregated with all such transactions occurring during the
calendar year does not, exceed $50,000. The Company has not made an
election under Treasury Regulation Section 1.1502-20(g) nor has had its
net operating losses or capital losses made subject to such an election
by a common parent of a Consolidated Group. The Company is not and has
not been required to make a basis reduction
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pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury
Regulation Section 1.337(d)-2(b).
(f) Except as set forth on Schedule 3.15(f) attached hereto,
the Company has not paid or incurred any penalty, fine or addition to
Tax in respect of any filing or failure to file any Tax Return, or any
failure to timely pay any Tax, or in respect of any other claim or
assessment by any taxing authority in respect of any Taxes.
(g) The Company has not been a "target" or "target affiliate"
as the result of an election or deemed election under Section 338 of
the Code.
(h) The Company is not a party to any agreement, contract,
arrangement or plan that has resulted, or will result, separately or in
the aggregate, in the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code.
(i) The Stockholder is not a person other than a United
States person within the meaning of the Code.
(j) The Stockholder is eligible to make an election under
Section 338(h)(10) of the Code (and any comparable election under
state, local or foreign tax law) with respect to the Company.
3.16 Books and Records. Except as set forth on Schedule 3.16
attached hereto, the general ledgers and books of account of the
Company are in all material respects complete and correct and have been
maintained in accordance with good business practice and in accordance
with all applicable procedures required by laws and regulations.
3.17 Contracts and Commitments.
(a) Schedules 3.17(a)(i) through (viii) attached
hereto contain a true, complete and correct list of the following
contracts and agreements, whether written or oral, requiring the
payment or receipt by the Company of $100,000 or more during any fiscal
year (except as specifically noted below) (collectively, the
"Contracts"):
(i) all loan agreements, indentures,
mortgages and guaranties to which the Company is a party or by
which the Company or any of its property is bound;
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<PAGE> 25
(ii) all pledges, conditional sale or title
retention agreements, security agreements, personal property leases and
lease purchase agreements, other than purchase money security
interests, to which the Company is a party or by which the Company or
any of its property is bound;
(iii) Customer Agreements with Significant
Customers;
(iv) regardless of the amount payable
thereunder, all collective bargaining agreements, employment and
consulting agreements, non-disclosure or confidentiality agreements
(other than those executed in the ordinary course of business by
employees, agents or independent contractors of the Company) to which
the Company is a party or by which the Company or any of its property
is bound;
(v) all agency, distributor, sales
representative, franchise or similar agreements to which the
Company is a party or by which the Company or any of its property
is bound;
(vi) all contracts, agreements or other
understandings or arrangements between the Company and the
Stockholder or any of their Affiliates;
(vii) regardless of the amount payable
thereunder, all contracts and agreements relating to past disposal
of waste (whether or not hazardous); and
(viii) any other material agreements or contracts
entered into by the Company for the provision of software products or
services principally relating to the maintenance and repair services
performed by the Company and specifically excluding such agreements
relating solely to administrative products and services, such as
contracts with Federal Express and United Parcel Service, but excluding
any agreement listed on Schedule 3.13(e).
(b) (i) Each Contract is a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, and neither the Stockholder nor the Company has any
knowledge that any Contract is not a valid and binding agreement of the
other parties thereto;
(ii) except as set forth on Schedule
3.17(b)(ii) attached hereto, the Company is not in material breach of
or material default under any Contract, and no event has occurred which
with the passage of time or giving of notice or both would constitute
such a material breach or default, result in
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a loss of material rights or result in the creation of any
material lien, charge or encumbrance, thereunder or pursuant
thereto;
(iii) except as set forth on Schedule 3.17(b)(iii),
to the knowledge of the Stockholder or the Company, after reasonable
inquiry, there is no existing material breach or material default by
any other party to any Contract, and no event has occurred which with
the passage of time or giving of notice or both would constitute a
material default by such other party, result in a loss of material
rights or result in the creation of any material lien, charge or
encumbrance thereunder or pursuant thereto;
(iv) except as set forth on Schedule
3.17(b)(iv) attached hereto, no Contract is expected to be performed
at, or to result in, a loss, except as part of a larger agreement or
arrangement which is profitable when taken as a whole; and
(v) except as set forth on Schedule
3.17(b)(v) attached hereto, the Company has not experienced any
shortages of material components or other supplies required to perform
maintenance services (collectively "Supplies") within the twelve (12)
month period preceding the date hereof, and the Company has on hand, or
has reason to believe it can timely obtain, on terms substantially
similar to the terms on which they have obtained in the past, a
sufficient quantity of Supplies to perform its obligations under the
Customer Agreements.
3.18 Consents of Third Parties. Set forth on Schedule 3.18
attached hereto is a true, correct and complete list of all material
consents and approvals of third parties (other than Governmental
Entities) that are required in connection with the consummation by the
Stockholder or the Company of the transactions contemplated by this
Agreement, including, but not limited to, any consents or approvals
required under any customer or supplier agreement or any Contract.
3.19 Compliance with Agreements and Laws. Except as set forth
on Schedule 3.19 attached hereto, the Company has all material
licenses, permits, approvals and certificates from federal, state and
local authorities reasonably necessary to conduct its business and own
and operate its assets (collectively, the "Permits"), all of which are
assignable to the Buyer without the consent of any Governmental Entity
or other party. The business and assets of the Company as conducted
since January 1, 1995 have complied, and on the date hereof comply in
all material respects, with all applicable federal, state, local or
foreign laws, regulations, ordinances, permits or orders (including,
but
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not limited to, any of the foregoing relating to employment or
employment discrimination, occupational safety or corrupt practices).
The Company has not had any notice or communication from any federal,
state, local or foreign governmental or regulatory authority or
otherwise since January 1, 1993 of any such violation or noncompliance.
3.20 Environmental Matters
(a) Except as set forth on Schedule 3.20(a) attached
hereto, the operations of the Company have complied, and on the date
hereof comply in all material respects, with all applicable
Environmental Laws. There is no pending or, to the knowledge of the
Stockholder and the Company, threatened administrative, civil or
criminal litigation, notice of violation, administrative proceeding, or
investigation, inquiry or information request by any other party,
including, without limitation, any Governmental Entity, relating to any
(i) Environmental Law involving or related to the Company, any
predecessor business or company acquired by the Company or any present
subsidiary or affiliate; or (ii) to any parcel of real property now
owned, operated or controlled by the Company, or predecessor business
or company acquired by the Company. For purposes of this Agreement, the
term "Environmental Law" means any federal, state or local law,
statute, ordinance, rule, regulation, administrative or judicial order
or common law in any way relating to the environment or occupational
health and safety.
Without limiting the foregoing, Environmental Laws include
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Clean Water Act, the Clean Air Act, the
Emergency Planning and Community Right-To-Know Act, the Occupational
Safety and Health Act, any and all amendments thereto, all state
analogs, and all rules or regulations promulgated under any of them.
(b) Except as set forth on Schedule 3.20(b) attached hereto,
to the knowledge of the Stockholder or the Company, after reasonable
inquiry, there has been no release to the environment at any real
property now owned, operated or controlled by the Company, or by a
predecessor business or company acquired by the Company, that: (i)
violated in any material respect any law, including any Environmental
Law; (ii) resulted in any obligation to investigate, report, or in any
way, address the release under any Environmental Law; or (iii) has
given rise to a claim against the Company or predecessor business or
company acquired by the Company.
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(c) For purposes of this Agreement, the terms "release,"
"environment," "contaminant," "pollutant," "petroleum" (including
petroleum-containing products and petroleum fractions), and "hazardous
substance" shall have the same meanings as they do in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended. For purposes of this Agreement, the terms "waste," "solid
waste," "pollutant" and "contaminant" shall have the same meanings as
they do in the Resource Conservation and Recovery Act, as amended. For
purposes of this Agreement, the terms "toxic material" and "chemical
substance" shall have the meanings set forth in the Toxic Substances
Control Act.
(d) To the knowledge of the Stockholder or the Company, after
reasonable inquiry, no wastes, hazardous substances, pollutants or
contaminants generated by the Company have been transported, stored or
disposed of in a way that materially violated any Environmental Law, or
in a way that has given rise to a claim of liability against the
Company, or predecessor business or company acquired by the Company,
or, if the Closing occurs, against the Buyer.
(e) No liens have arisen under or pursuant to any
Environmental Law on any real property or facility owned, operated or
controlled by the Company, or by a predecessor business or company
acquired by the Company, and no action has been taken by any government
entity or, to the knowledge of the Company or the Stockholder, is
contemplated, threatened or in process, that subjects any such property
or facility to such a lien, in connection with the presence of any
material in any way regulated by an Environmental Law.
(f) Set forth on Schedule 3.20(f) attached hereto is a list
of all material environmental reports (including all evaluations of
whether properties, facilities or operations comply with Environmental
Laws), investigations and audits known by the Company to exist, after
reasonable inquiry ("Environmental Reports"), relating to any real
property, operation or facility now or formerly owned or controlled by
the Company or by any predecessor business or company acquired by the
Company or by any current or former subsidiary of the Company.
(g) Neither the Company nor the Stockholder is aware of any
environmental liability of any transporter (an "Environmental
Transporter") or treatment, storage, recycling or disposal facility (an
"Environmental Disposal Facility") relating in any way to a material or
waste originating at a facility now or formerly owned by the Company or
a current subsidiary of the
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Company or for which the Company may be responsible pursuant to any
Environmental Law.
(h) To the knowledge of the Stockholder or the Company, after
reasonable inquiry, the Company possesses, in a current and complete
form, all material permits, approvals, authorizations or other
documents which are required pursuant to any Environmental Law in order
to lawfully conduct the business of the Company as presently conducted
(the "Environmental Permits"), and all applications and certifications
relating to those permits are true and accurate.
3.21 Employee Relations.
(a) Except as set forth on Schedule 3.21(a) attached
hereto, the Company is in material compliance with all federal, state
and municipal laws respecting employment and employment practices,
terms and conditions of employment, and wages and hours, and is not
engaged in any unfair labor practice, and there are no material
arrearages in the payment of wages or social security taxes which would
violate applicable law.
(b) Except as set forth on Schedule 3.21(b)
attached hereto:
(i) none of the employees of the Company is
represented by any labor union;
(ii) there is no unfair labor practice
complaint against the Company pending before the National Labor
Relations Board or any state or local agency;
(iii) there is no pending labor strike or other
material labor trouble affecting the business of the Company as
presently conducted (including, without limitation, any organizational
drive);
(iv) there is no material labor grievance
pending against the Company;
(v) there is no pending representation
question respecting the employees of the Company;
(vi) there are no pending arbitration
proceedings arising out of or under any collective bargaining agreement
to which the Company is a party, or to the knowledge of the Stockholder
or the Company, any basis for which a claim may be made under any
collective bargaining agreement to which the Company is a party; and
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(vii) the Company has no continuing obligation for
health, life, medical insurance or other similar fringe benefits in any
material amount to any former employee of the Company.
3.22 Employee Benefit Plans.
(a) Schedule 3.22(a) attached hereto contains a complete and
accurate list of all Employee Benefit Plans (as defined below)
maintained, or contributed to, by the Company (hereinafter, each such
Employee Benefit Plan shall be referred to as a "Company Employee
Benefit Plan") at any time on or after January 1, 1990. For purposes of
this Agreement, the term "Employee Benefit Plan" means any "employee
pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), any
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA),
any plan that would be an "employee pension benefit plan" or "employee
welfare benefit plan" but for the fact that such plan is maintained
outside the United States, and any other written or oral plan,
agreement or arrangement involving direct or indirect compensation,
including without limitation insurance coverage, severance benefits,
disability benefits, deferred compensation, bonuses, stock options,
stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation, post-retirement compensation or vacations or
similar practices. For purposes of this Agreement, the term "Group
Employee Benefit Plan" means an Employee Benefit Plan maintained or
contributed to by an ERISA Affiliate (as defined below). For purposes
of this Agreement, the term "ERISA Affiliate" means any entity which is
a member of (i) a controlled group of corporations (as defined in
Section 414(b) of the Code), (ii) a group of trades or businesses under
common control (as defined in Section 414(c) of the Code), or (iii) an
affiliated service group (as defined under Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which
includes, or included at any time on or after January 1, 1990, the
Company. True, correct and complete copies of (i) all Company Employee
Benefit Plans which have been reduced to writing, (ii) written
summaries of all unwritten Company Employee Benefit Plans, (iii) all
related trust agreements, insurance contracts and summary plan
descriptions, (iv) all annual reports filed on IRS Form 5500, 5500C or
5500R (including all required Schedules thereto) for the last three
plan years for each Company Employee Benefit Plan for which a filing is
required, and (v) all employee handbooks, have been delivered by the
Stockholder to the Buyer. With respect to each Company Employee Benefit
Plan that is a "defined benefit plan," as such term is defined in
Section 3(35) of ERISA (the "Defined Benefit Plans"), true, correct and
complete copies of (i) the annual actuarial valuation reports for the
last five years, (ii) the Form 5500 and Schedule A
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or B thereto, or both, filed for the last five years and (iii) any
filings made with the Pension Benefit Guaranty Corporation (the
"PBGC"), Internal Revenue Service or Department of Labor, or any
correspondence with or from such agencies, regarding the termination of
any such Defined Benefit Plan, have been delivered to the Buyer. The
financial statements of each funded Company Employee Benefit Plan as of
the end of the most recent plan year, and the list of the investments
of such Company Employee Benefit Plan as of the most recent plan year
end, accurately reflect the financial condition of such funded Company
Employee Benefit Plan, and there have been no material changes in such
investments since such date. Each Company Employee Benefit Plan has
been administered in all material respects in accordance with its
terms. The Company has in all material respects met its obligations
with respect to such Company Employee Benefit Plan and has made all
required contributions thereto, and all unpaid amounts properly accrued
as liabilities of the Company, have been recorded on the books of the
liable entity and there has been no default or violation by any other
party with respect to such Company Employee Benefit Plan. Except as set
forth on Schedule 3.22(a), all Company Employee Benefit Plans are in
compliance, in all material respects, with all applicable laws and
regulations, including without limitation ERISA, the Code and the
regulations thereunder and, to the extent applicable, foreign law.
(b) There are no pending or, to the knowledge of the
Stockholder or the Company, threatened investigations by any
Governmental Entity, termination proceedings or other claims (except
claims for benefits payable in the normal operation of the Company
Employee Benefit Plans and proceedings with respect to qualified
domestic relations orders), suits or proceedings against or involving
any Company Employee Benefit Plan or asserting any rights or claims to
benefits under any Group or Company Employee Benefit Plan that could
give rise to any material liability against a Company Employee Benefit
Plan or the Company.
(c) All the Company Employee Benefit Plans that are intended
to be qualified under Section 401(a) of the Code are so qualified and
any corresponding trust is exempt under Section 501(a) of the Code.
Except as set forth on Schedule 3.22(c) attached hereto, the IRS has
issued a favorable determination letter with respect to the
qualification of each such Company Employee Benefit Plan under the Tax
Reform Act of 1986 and subsequent legislation or timely application has
been made for such a letter. No such determination letter has been
revoked and no such revocation has been threatened, and nothing has
occurred since the date of each most recent determination letter that
could reasonably be expected to cause the relevant Company Employee
Benefit Plan or corresponding trust to lose such qualification or
exemption. Except as set forth on Schedule 3.22(c) attached
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hereto, all Company Employee Benefit Plan assets that are not held by a
regulated insurance company are invested in a separate trust, or in a
trust with one or more other similar plans under which the assets of
each plan are separately accounted for and available only to provide
benefits to employees and beneficiaries covered under the Company
Employee Benefit Plan and to pay allocable administrative expenses.
Each insurance contract through which benefits under a Company Employee
Benefit Plan are provided provides benefits only for employees and
dependents covered under the Plan. Each Company Employee Benefit Plan
is maintained by the Company under a plan document which does not
provide for other participating employers except for the Company or any
ERISA Affiliate of the Company and no Plan provides or has provided
credit with respect to service other than with the Company or any ERISA
Affiliate of the Company.
(d) The Company has never been required to contribute to a
multiemployer plan. The Company will not be liable for any withdrawal
liability resulting from a complete or partial withdrawal by an ERISA
Affiliate from a multiemployer plan, regardless of when such withdrawal
occurs, or any other liability with respect to a multiemployer plan to
which an ERISA Affiliate is, or has ever been, required to contribute.
(e) The Company will not have any liability for: (i) any
Group Employee Benefit Plan that is subject to Part 3 of Subtitle B of
Title I of ERISA or Section 412 of the Code, or both, which has
incurred any "accumulated funding deficiency" (as defined in ERISA),
whether or not waived; (ii) any failure by the Company to pay any
amounts due and owing as required by the terms of any Group or Company
Employee Benefit Plan; (iii) any "reportable event" within the meaning
of Section 4043 of ERISA, or any event described in Section 4063(a) of
ERISA, with respect to any Group Employee Benefit Plan; (iv) any
failure by the Company or any ERISA Affiliate to make any payment to
any Group or Company Employee Benefit Plan required under Section 302
of ERISA; (v) any adoption by the Company or any ERISA Affiliate of an
amendment to any Group or Company Employee Benefit Plan which requires
the provision of security under Section 307 of ERISA; and (vi) any
proceedings instituted by the PBGC to terminate a Group or Company
Employee Benefit Plan pursuant to Section 4042 of ERISA.
(f) The Company would not be liable for any amount pursuant
to Section 4062, 4063, 4064, 4068 or 4069 of ERISA if any of the Group
Employee Benefit Plans which are subject to Title IV of ERISA were to
terminate whether before or after the Closing.
(g) There are no unfunded obligations under any Company
Employee Benefit Plan providing benefits after termination of
employment to any employee of the Company (or to
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<PAGE> 33
any beneficiary of any such employee), including but not limited to
retiree health coverage and deferred compensation, but excluding
continuation of health coverage required to be continued under Section
4980B of the Code or applicable state law and insurance conversion
privileges under state law.
(h) No act or omission has occurred and no condition exists
with respect to any Group or Company Employee Benefit Plan maintained
by the Company or any ERISA Affiliate that would subject the Company to
any material fine, penalty, tax or liability of any kind imposed under
ERISA or the Code.
(i) Except as set forth in Schedule 3.22(i) attached hereto,
no Company Employee Benefit Plan is funded by, associated with, or
related to a "voluntary employee's beneficiary association" within the
meaning of Section 501(c)(9) of the Code.
(j) No Company Employee Benefit Plan, plan documentation or
agreement, summary plan description or other written communication
distributed generally to employees by its terms prohibits the Company
from amending or terminating any such Company Employee Benefit Plan.
(k) Schedule 3.22(k) attached hereto discloses each: (i)
agreement with any director, officer or other key employee of the
Company (A) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving
the Company of the nature of any of the transactions contemplated by
this Agreement, (B) providing any term of employment or compensation
guarantee or (C) providing severance benefits or other benefits after
the termination of employment of such director, officer or key
employee; (ii) agreement, plan or arrangement under which any person
may receive payments from the Company that may be subject to the tax
imposed by Section 4999 of the Code or included in the determination of
such person's "parachute payment" under Section 280G of the Code; and
(iii) agreement or plan binding the Company or any Subsidiary,
including without limitation any stock option plan, stock appreciation
right plan, restricted stock plan, stock purchase plan, severance
benefit plan, or any Employee Benefit Plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will
be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
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<PAGE> 34
3.23 Necessary Properties and Assets. The assets, properties,
rights, privileges and franchises of the Company include all the
assets, properties, rights, privileges and franchises to permit the
Buyer to conduct the business of the Company in substantially the same
manner as such business has been conducted prior to the date hereof.
3.24 Insurance. Schedule 3.24 attached hereto sets forth a
true, correct and complete summary describing the coverages, policy
limits, retentions/deductibles and broker of record for all fire,
theft, casualty, general liability, workers compensation, business
interruption, environmental impairment, product liability, automobile
and other insurance policies maintained by the Company and of all life
insurance policies maintained on the lives of any of their employees
(collectively, the "Insurance Policies"). No claims in an amount in
excess of $50,000 have been made under any such Insurance Policy since
January 1, 1993. The Insurance Policies are in full force and effect
and are in amounts of a nature which are adequate and customary for the
Company's business. All premiums due on the Insurance Policies or
renewals thereof have been paid, and there is no material default under
the Insurance Policies. The Company has not received any notice or
other communication from any issuer of the Insurance Policies since
January 1, 1993 canceling or materially amending any of the Insurance
Policies, materially increasing any deductibles or retained amounts
thereunder, or materially increasing the annual or other premiums
payable thereunder, and, to the knowledge of the Stockholder or the
Company, after reasonable inquiry, no such cancellation, amendment or
increase of deductibles, retainers or premiums is threatened. The
Company does not have any outstanding claims or any dispute with any
insurance carrier regarding claims, settlements or premiums and neither
the Company has failed to give any notice or present any claim under
any Insurance Policy in due and timely fashion which would have a
Material Adverse Effect. There are no outstanding requirements or
recommendations by any issuer of the Insurance Policies or by any Board
of Fire Underwriters or other similar body exercising similar functions
or by any governmental authority exercising similar functions which
requires or recommends any changes in the conduct of the business of,
or any material repairs or other material work to be done on or with
respect to any of the properties or assets of, the Company.
3.25 Absence of Certain Changes or Events.
(a) Except as set forth on Schedule 3.25 attached
hereto, since the Balance Sheet Date, the Company has not entered into
any transaction which is not in the usual and ordinary course of
business conducted by the Company prior to the
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date hereof, and, without limiting the generality of the
foregoing, the Company has not:
(i) incurred any obligation or liability
for borrowed money, other than from its Affiliates (as defined in
Section 25 hereof);
(ii) mortgaged, pledged or subjected to
lien, charge or other encumbrance any of their respective
properties or assets other than Security Interests;
(iii) sold, assigned or transferred any of its
tangible or intangible assets with a sale price of more than $100,000
in excess of book value, except for Field Spare Parts, Inventory or
Consumables purchased or sold in the ordinary course of business;
(iv) purchased any tangible or intangible
assets having a value of more than $250,000, except for Field Spare
Parts, Inventory or Consumables purchased in the ordinary course of
business or as provided in clause (x) below;
(v) cancelled or discharged any debts or
claims in a manner inconsistent with existing reserves;
(vi) suffered any losses of personal or real
property, whether insured or uninsured, and whether or not in the
control of the Company, which would have a Material Adverse
Effect;
(vii) made any material change in the terms,
status or funding condition of any Employee Benefit Plan, as defined in
Subsection 3.22 hereof;
(viii) engaged any new employee for a salary
in excess of $75,000 per annum;
(ix) made, or committed to make, any change
in excess of ten percent (10%) in the compensation payable to any
officer, director or employee of the Company or any Subsidiary, or any
bonus payment or similar arrangements in excess of $5,000 made to or
with any of such officers, directors, employees or agents;
(x) incurred any capital expenditure in
excess of $250,000 in any instance or $500,000 in the aggregate (other
than expenditures for Field Spare Parts, Inventory, Consumables or
building improvements); or
(xi) suffered any material adverse change
which has had a Material Adverse Effect.
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(b) Neither the Company nor the Stockholder have
knowledge of any existing or threatened occurrence, event or
development which, as far as can be reasonably foreseen, could have a
Material Adverse Effect.
3.26 Customers. Schedule 3.26 attached hereto sets forth a
true, correct and complete list of the names of each customer of the
Company which accounted for more than one percent (1%) of the
consolidated revenues of the Company in the fiscal year ended December
31, 1995 (the "Significant Customers"). To the knowledge of the
Stockholder or the Company, no material adverse event or material
failure of performance on the part of the Company has occurred under a
Customer Agreement with a Significant Customer. Since January 1, 1995,
no Significant Customer of the Company has notified the Company that it
intends to discontinue or materially reduce its relationship with the
Company.
3.27 Suppliers. Schedule 3.27 attached hereto sets forth a
true, correct and complete list of (i) the names of each of the
suppliers of the Company which accounted for a dollar volume of
purchases by the Company and the Subsidiaries in excess of $250,000 for
the fiscal year ended December 31, 1995, and (ii) the present sole
source suppliers of significant goods or services, other than
utilities, for any product with respect to which practical alternative
sources of supply are not available on comparable terms and conditions.
The Company is not more than 60 days in arrears in any trade accounts
payable or other payments owing to any supplier, other than amounts
which are the subject of bona fide disputes for which adequate reserves
have been taken.
3.28 Warranty and Product Liability Claims. There have been
no material warranty and product liability claims, whether pursuant to
an agreement or otherwise, other than for maintenance and repair
services under the Customer Agreements or for warranty services
provided pursuant to partnership agreements, made against the Company
or any of the Subsidiaries from January 1, 1995 through the date
hereof.
3.29 Indebtedness to and from Officers, Directors and
Stockholders. The Company is not indebted, directly or indirectly, to
any person who is an officer or director or any Affiliate of any such
person in any amount in excess of $10,000, any of which amounts have
been reflected on the Current Balance Sheet, other than for salaries
for services rendered or reimbursable business expenses in any amount
in excess of $10,000, and no such officer or director or any Affiliate
is indebted to the Company except for advances made to employees of the
Company in the ordinary course of business to meet reimbursable
business expenses anticipated to be incurred by such obligor.
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3.30 Banking Facilities. Schedule 3.30 attached hereto sets
forth a true, correct and complete list of:
(a) each bank, savings and loan or similar financial
institution in which the Company or any of the Subsidiaries has an
account or safety deposit box and the numbers of the accounts or safety
deposit boxes maintained by the Company thereat; and
(b) the names of all persons authorized to draw on
each such account or to have access to any such safety deposit box
facility.
3.31 Powers of Attorney and Suretyships. The Company has no
general or special powers of attorney outstanding (whether as grantor
or grantee thereof) or has any obligation or liability (whether actual,
accrued, accruing, continent or otherwise) as guarantor or surety, in
respect of the obligation of any person, corporation, partnership,
joint venture, association, organization or other entity.
3.32 Conflicts of Interest. No individual who is an officer,
director or stockholder of the Company nor, to the knowledge of the
Stockholder or the Company, any Affiliate of any such person, now has
or within the last three (3) years had, either directly or indirectly,
(i) an equity interest (representing more than five percent (5%) of the
outstanding capital stock) or debt interest (representing an amount
equal to more than five percent (5%) of such person or entity's total
assets) in, or (ii) served as an officer or director of, any customer,
supplier or competitor of the Company.
3.33 Regulatory Approvals. Except for compliance with the
requirements of the HSR Act, no consents, approvals, authorizations or
other requirements prescribed by any law, rule or regulation must be
obtained or satisfied by the Stockholder, the Company which are
necessary for (i) the execution and delivery by the Stockholder and the
Company of this Agreement or any documents to be executed and delivered
by the Stockholder or the Company in connection herewith, or (ii) the
consummation of the transactions contemplated by this Agreement.
3.34 Disclosure. This Agreement, the Exhibits and Schedules
attached hereto and any certificate furnished or to be furnished to the
Buyer pursuant to Section 8 hereto, insofar as it relates to the
Stockholder or the Company, do not and will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated herein or therein or necessary to make the statements and
facts contained herein or therein, in
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light of the circumstances in which they are made, not false or
misleading.
4. Representations of the Buyer
The Buyer represents and warrants to the Stockholder as
follows:
4.01 Organization and Authority. The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, and has all necessary corporate power and
authority to own its properties and to carry on its business as now
being conducted. The Buyer has full power to execute and deliver this
Agreement and the agreements contemplated herein, and to consummate the
transactions contemplated hereby and thereby. True, correct and
complete copies of the Certificate of Incorporation and the Bylaws of
the Buyer, as amended to date, have been previously delivered to the
Stockholder, and no amendments have been made thereto or have been
authorized since the date thereof.
4.02 Authorization. The execution and delivery of this
Agreement by the Buyer, and the agreements provided for herein, and the
consummation by the Buyer of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate action.
This Agreement and all such other agreements and obligations entered
into and undertaken in connection with the transactions contemplated
hereby constitute the valid and legally binding obligations of the
Buyer, enforceable against the Buyer in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally and general
principles of equity, regardless of whether applied in equity or at
law. The execution, delivery and performance of this Agreement and the
agreements provided for herein, and the consummation by the Buyer of
the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both, (a)
assuming compliance by the parties with the requirements of the HSR
Act, violate the provisions of any law, rule or regulation applicable
to the Buyer; (b) violate the provisions of the Buyer's Certificate of
Incorporation or Bylaws; (c) violate any judgment, decree, order or
award of any court, governmental body or arbitrator; or (d) conflict
with or result in the breach or termination of any term or provision
of, or constitute a default under, or cause any acceleration under, or
cause the creation of any lien, charge or encumbrance upon the
properties or assets of the Buyer pursuant to, any indenture, mortgage,
deed of trust or other agreement or instrument to which
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<PAGE> 39
the Buyer is a party or by which the Buyer is or may be bound which
would have a Material Adverse Effect.
4.03 Consents of Third Parties. Set forth on Schedule 4.03
attached hereto is a true, correct and complete list of all material
consents and approvals of third parties (other than Governmental
Entities) that are required in connection with the consummation by the
Buyer of the transactions contemplated by this Agreement.
4.04 Regulatory Approvals. Except for compliance with the
requirements of the HSR Act, no consents, approvals, authorizations or
other requirements prescribed by any law, rule or regulation must be
obtained or satisfied by the Buyer which are necessary for (i) the
execution and delivery by the Buyer of this Agreement or any documents
to be executed and delivered by the Buyer in connection herewith, or
(ii) the consummation of the transactions contemplated by this
Agreement.
4.05 Disclosure. No representation or warranty by the Buyer
in this Agreement or in any Exhibit or Schedule hereto, or in any
certificate delivered or to be delivered pursuant hereto, contains or
will contain any untrue statement of a material fact or omits or will
omit any material fact necessary in order to make the statements
contained therein not misleading.
4.06 Investment Representation. The Buyer is acquiring the
Shares from the Stockholder for its own account for investment and not
with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the
same; and, except as contemplated by this Agreement and the agreements
contemplated herein, the Buyer has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof.
4.07 Financing Commitment. The Buyer has adequate financing
to consummate the transactions contemplated by this Agreement.
5. Access to Information; Public Announcements
5.01 Access to Management, Properties and Records.
(a) From the date of this Agreement until the Closing
Date, the Stockholder and the Company shall afford the authorized
representatives of the Buyer reasonable access upon reasonable notice
and during normal business hours to all management personnel (after
discussion with the Company's senior management), offices, properties,
books and records of the
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Company, so that the Buyer may have reasonable opportunity to make such
investigation as it shall reasonably desire to make of the management,
business, properties and affairs of the Company, and the Buyer shall be
permitted to make abstracts from, or copies of, all such books and
records. The Stockholder and the Company shall furnish to the Buyer
such financial and operating data and other information as to the
business of the Company and the Subsidiaries as the Buyer shall
reasonably request.
(b) The Buyer shall identify to the Stockholder and
the Company all files pertaining to the business or operations of the
Company held by any other party, including any federal, state, county
or local authorities, agencies or instrumentalities which the Buyer
reasonably believes are necessary to its investigation of the Company
and the release of which requires the consent of the Stockholder or the
Company. Such consent shall not be unreasonably withheld by the
Stockholder or the Company. In any case where a release by a present or
former employee of the Company or any Subsidiary is necessary, the
Stockholder and the Company shall exercise their commercially
reasonable efforts to obtain such a release.
5.02 Public Announcements. The parties agree that, except as
otherwise required by law or any applicable rule or regulation of any
securities exchange, any and all public pronouncements or other public
communications concerning this Agreement and the purchase and sale of
the Shares by the Buyer, and the timing, manner and content of such
disclosures, shall be subject to the mutual agreement of the
Stockholder and the Buyer, which agreement shall not be unreasonably
withheld or delayed. In the event that any party determines that an
announcement is required by law or any applicable rule or regulation of
any securities exchange, it will so inform the other parties and give
them the opportunity to review any such announcement prior to making
any such disclosure.
5.03 Memorandum; Disclaimer of Projections. The Buyer hereby
acknowledges and agrees that neither the Stockholder nor the Company
makes any representations or warranties to the Buyer except as
specifically made in this Agreement and in the Exhibits and Schedules
hereto, and in any certificates to be delivered pursuant to Section 8
hereto. In particular, the Stockholder and the Company do not make any
representations or warranties to the Buyer with respect to any
financial projections or financial forecasts relating to the Company or
Dataserv Mexico. With respect to any such financial projections or
financial forecasts delivered by or on behalf of the Stockholder or the
Company to the Buyer, the Buyer acknowledges that (i) there are
uncertainties inherent in attempting to make such financial projections
and financial forecasts, (ii) it is familiar with such uncertainties,
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<PAGE> 41
(iii) it is taking full responsibility for making its own evaluation of
the adequacy and accuracy of all such financial projections and
financial forecasts so furnished to it, and (iv) it shall have no claim
against the Stockholder or the Company with respect to such financial
projections and financial forecasts.
6. Pre-Closing Covenants of the Stockholder and the Company
From and after the date hereof and until the Closing Date:
6.01 Conduct of Business. Except as otherwise contemplated by
this Agreement, or otherwise agreed to in writing by the Buyer and the
Stockholder, during the period from the date of this Agreement to the
Closing:
(a) The Company will, and the Stockholder will
cause the Company to:
(i) conduct its business, and otherwise
operate and maintain its assets, and manage and discharge its
liabilities, in the ordinary course, in a manner consistent with its
past practices. Without limiting the generality of the foregoing, on or
before the Closing Date, the Company will not (A) enter into any
material transaction or agreement except in the ordinary course of
business; (B) except as otherwise expressly provided in this Agreement,
make, accrue or become liable for any compensation, bonus, profit
sharing, incentive payment, benefit or similar payment, except for
accruals under existing plans, or increase any compensation, bonus,
benefit or similar amount payable to any employee other than in the
ordinary course of business or enter into, or modify any existing,
employment arrangement; (C) sell, lease or otherwise dispose of any
material assets, except in the ordinary course of business; or (D)
materially change the manner in which the Company's business is being
operated on the date of this Agreement; and
(ii) to the extent consistent with the
foregoing, use its commercially reasonable efforts to maintain intact
the current business of the Company and, in light of the transactions
contemplated hereby, preserve the relationships of the Company with its
suppliers, customers and employees.
(b) The Company will not enter into any material
agreement with the Stockholder or its Affiliates (other than the
Company), other than agreements entered into on arms' length terms.
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6.02 Absence of Material Changes. Without the prior
written consent of the Buyer, the Company shall not:
(a) take any action to amend its charter documents or
bylaws;
(b) issue any stock, bonds or other corporate
securities or grant any option or issue any warrant to purchase or
subscribe for any of such securities or issue any securities
convertible into such securities;
(c) incur any obligation or liability (absolute or
contingent), except current liabilities incurred and obligations
arising in the ordinary course of business, or agree to sell products
or perform services, or make any bid to so sell or perform, which are
expected to be sold or performed at, or to result in, a loss, except as
part of a larger agreement or arrangement which is profitable when
taken as a whole;
(d) mortgage, pledge, or subject to any lien, charge
or any other encumbrance any of their respective assets or properties,
other than in the ordinary course of business;
(e) cancel or discharge any debts or claims, except in
the ordinary course of business and consistent with existing reserves;
(f) merge or consolidate with or into any corporation
or other entity;
(g) waive any rights of material value;
(h) modify, amend, alter or terminate any of its
executory contracts of a material value or which are material in
amount, other than in the ordinary course of business;
(i) take or permit any act or omission constituting a
material breach or default under any material contract, indenture or
agreement by which it or its properties are bound;
(j) fail to operate its business and maintain its
books, accounts and records consistent with past practice and in the
ordinary and regular course of business and maintain in good repair its
business premises, fixtures, machinery, furniture and equipment;
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(k) enter into any lease, contract, agreement or
understanding, other than those entered into in the ordinary course of
business calling for payments which individually do not exceed $100,000
for each such lease, contract, agreement or understanding;
(l) incur any capital expenditure in excess of
$250,000 in an instance or $500,000 in the aggregate (other than
expenditures for (i) Field Spare Parts, Inventory and Consumables) or
(ii) renovations to the facility located at 19011 Lake Drive East,
Chanhassen, Minnesota 55317 (the "Chanhassen Property");
(m) engage any new employee for a salary in excess of
$75,000 per annum;
(n) materially alter the terms, status or funding
condition of any Company Employee Benefit Plan;
(o) terminate the employment of any employee, except
for cause; or
(p) commit or agree to do any of the foregoing in the
future.
6.03 Delivery of Interim Financial Statements. As promptly as
possible following the last day of each month after the date hereof
until the Closing Date, and in any event within twenty (20) days after
the end of each such month, the Stockholder or the Company shall
deliver to the Buyer the consolidated balance sheet of the Stockholder
and the related statement of operations for the one-month period then
ended.
6.04 Communications with Customers and Suppliers. The Company
and the Buyer will cooperate in communications with material suppliers
and customers to accomplish the transfer of the business of the Company
to the Buyer on the Closing Date.
6.05 Compliance with Laws. The Company will comply in all
material respects with all laws and regulations which are applicable to
it or to the conduct of its business and will perform and comply with
all material contracts, commitments and obligations by which they are
bound.
6.06 Continued Truth of Representations and Warranties.
Neither the Stockholder nor the Company will take any actions which
would result in any of the representations or warranties set forth in
Sections 2 and 3 hereof being untrue.
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6.07 Continuing Obligation to Inform. From time to time prior
to the Closing, the Stockholder and the Company will deliver or cause
to be delivered to the Buyer supplemental information concerning events
subsequent to the date hereof which would render any statement,
representation or warranty in this Agreement or any information
contained in any Schedule attached hereto inaccurate or incomplete in
any material respect at any time after the date hereof until the
Closing Date; provided, that if the Buyer has the right to terminate
this Agreement pursuant to Subsection 13.03 because of such development
and the Buyer does not exercise such right within ten (10) business
days of the receipt of such supplemental information, such supplemental
information shall constitute an amendment of any statement,
representation or warranty in this Agreement or any Schedule, Exhibit
or document furnished pursuant hereto.
6.08 Exclusive Dealing. Neither the Stockholder nor the
Company will, directly or indirectly, through any officer, director,
agent or otherwise, (i) with or through any other party engage in any
negotiations with or provide any information to any other person, firm
or corporation with respect to an acquisition transaction involving the
Company or its business, (ii) with or through any other party solicit
any proposal relating to the acquisition of, or any major transaction
involving the Company or its business, or (iii) dispose of any material
assets that would constitute a part of the Company's business other
than in the ordinary course of business. The Stockholder and the
Company agree to promptly notify the Buyer of any such proposal or
offer, or any inquiry or contact with respect thereto received by the
Company or the Stockholder.
6.09 Capital Contribution. Before the Closing Date, the
Stockholder shall make a capital contribution to the Company in the
full amount of (i) any intercompany indebtedness owed by the Company to
the Stockholder and its Affiliates as a result of any working capital
advances and all accrued interest thereon, and (ii) any funding
obligations to a voluntary employee's beneficiary association (the
"VEBA Contribution"), as of the Closing Date. Upon such contribution,
all intercompany liabilities of (a) the Company or (except Excluded
Intercompany Indebtedness, as defined below) to the Stockholder or any
of its Affiliates, or (b) the Stockholder or any of its Affiliates to
the Company or (other than Excluded Intercompany Indebtedness of the
type described in clause (i) of the definition set forth below), shall
be cancelled, released and discharged. The term "Excluded Intercompany
Indebtedness" shall mean intercompany indebtedness or liabilities (i)
in respect of goods or services provided by one person to the other,
and (ii) other customary trade payables.
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6.10 Assignment of Assets and Liabilities of Dataserv Mexico.
On the Closing Date, the Stockholder shall cause Dataserv Mexico to
assign to Wang de Mexico S.A. de C.V., which is an Affiliate of the
Buyer, all of the assets and liabilities of Dataserv Mexico set forth
on Schedule 6.10 attached hereto. Such assignment shall be in full
settlement of the intercompany debt due from Dataserv Mexico to the
Company. Notwithstanding the foregoing, any and all restructuring
liabilities with respect to Dataserv Mexico, including but not limited
to severance obligations, shall remain the obligation of the
Stockholder. After the Closing Date, the Buyer shall take such actions
as are reasonably requested by the Stockholder, at the Stockholder's
expense, to assist in the liquidation of Dataserv Mexico.
6.11 HSR Act Notification. Each of the Buyer and Seller shall
file or cause to be filed a premerger notification and report form
under the HSR Act, as soon as practicable after the date hereof, unless
such filings have already been made, and shall promptly comply with or
cause prompt compliance with any additional requests for information
including any "second request" from the Department of Justice or the
Federal Trade Commission. The Buyer's and Seller's obligations
hereunder to close the transaction which is the subject of this
Agreement are contingent upon the receipt of early termination or the
expiration of the waiting period under the HSR Act.
6.12 Chanhassen Property. Before the Closing Date, (i) the
Company shall convey, assign and transfer the Chanhassen Property to
the Stockholder or one of its Affiliates (the "Chanhassen Transferee")
and (ii) the Chanhassen Transferee, the Buyer and the Company shall
negotiate a lease for the Chanhassen Property (the "Chanhassen Lease")
containing the material terms set forth on Schedule 6.12 attached
hereto and such other terms as the parties may agree.
6.13 Assignment and Assumption of Litigation Rights, Titles,
Interests and Obligations. On the Closing Date, the Stockholder shall
assign all right, title and interest to the Buyer in, and the Buyer
shall assume all obligations related to, the litigation matters set
forth on Schedule 3.07.
7. Best Efforts to Obtain Satisfaction of Conditions
The Stockholder, the Company and the Buyer covenant and agree
to use their commercially reasonable efforts to obtain the satisfaction
of the conditions specified in this Agreement.
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8. Conditions to Obligations of the Buyer
The obligations of the Buyer under this Agreement are subject
to the fulfillment, at the Closing Date, of the following conditions
precedent, each of which may be waived in writing in the sole
discretion of the Buyer:
8.01 Continued Truth of Representations and Warranties of the
Stockholder and the Company; Compliance with Covenants and Obligations.
The representations and warranties of the Stockholder and the Company
shall be true on and as of the Closing Date as though such
representations and warranties were made on and as of such date (even
though they purport to have been given on a date prior to the Closing
Date), except for any changes permitted by the terms hereof or
consented to in writing by the Buyer. The Stockholder and the Company
shall have performed and complied with all terms, conditions,
covenants, obligations, agreements and restrictions required by this
Agreement to be performed or complied with by each of them prior to or
at the Closing Date.
8.02 Performance by the Stockholder and the Company. At the
Closing, each of the Stockholder and the Company shall have delivered
to the Buyer a certificate signed by each the President and Chief
Financial Officer of the Stockholder and the Company, as the case may
be, as to their compliance with Subsection 8.01 hereof.
8.03 Absence of Material Adverse Change. Since December 31,
1995, the Company shall not have suffered or, to the knowledge of the
Stockholder or the Company, had threatened any material adverse change
which could reasonably be expected to have a Material Adverse Effect.
8.04 HSR Act. The waiting period under the HSR Act shall have
expired or been terminated.
8.05 Consent of Third Parties. The Stockholder and the
Company shall have received all requisite consents and approvals of all
(i) third parties whose consent or approval is required in order for
the Stockholder and the Company to consummate the transactions
contemplated by this Agreement, including without limitation, those set
forth on Schedule 3.18 attached hereto and (ii) customers set forth on
Schedule 8.05 attached hereto, each of which accounted for more than
ten percent (10%) of the consolidated revenues for the Company in the
fiscal year ended December 31, 1995. The Buyer will work in good faith
to assist the Stockholder and the Company in obtaining the consents of
the customers set forth on Schedule 8.05.
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8.06 Adverse Proceedings. No action or proceeding by or
before any court or other governmental body shall have been instituted
or threatened by any governmental body or person whatsoever which shall
seek to restrain, prohibit or invalidate the transactions contemplated
by this Agreement or which might, in the reasonable opinion of Buyer,
materially and adversely affect the right of the Buyer to own the
Shares or to own or operate the business of the Company after the
Closing.
8.07 Opinion of Counsel. The Buyer shall have received an
opinion of Dorsey & Whitney, counsel to the Stockholder and the
Company, dated as of the Closing Date, in substantially the form
attached hereto as Exhibit A, and as to such other matters as may be
reasonably requested by the Buyer or its counsel.
8.08 Chanhassen Lease. The Buyer, the Company and the
Chanhassen Transferee shall have executed the Chanhassen Lease.
8.09 Guaranty. BBS Holdings, Inc., the parent of the
Stockholder, shall have executed the Guaranty attached hereto as
Exhibit B.
8.10 Acknowledgment Letter. BellSouth Corporation shall have
executed a letter acknowledging its obligations as an Affiliate of the
Stockholder pursuant to Subsection 11.05 hereof.
8.11 Closing Deliveries. The Buyer shall have received at or
prior to the Closing such documents, instruments or certificates as the
Buyer may reasonably request including, without limitation:
(a) the stock certificates representing the Shares
duly endorsed in accordance with Subsection 1.01 of this Agreement;
(b) such certificates of the Company's officers and of
the Stockholder and such other documents evidencing satisfaction of the
conditions specified in this Section 8 as the Buyer shall reasonably
request;
(c) a certificate of the Secretary of State of the
State of Minnesota as to the legal existence and good standing
(including tax) of the Company in Minnesota;
(d) certificates of the Secretary of State in each
state in which (i) the Company maintains an office or other facility or
(ii) the Company generated five percent (5%) or more of its revenues in
the fiscal year ending December 31, 1995, as to
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the due qualification and good standing of the Company in each
such jurisdiction;
(e) certificates of the Secretary of the Company
attesting to the incumbency of the Company's officers, the authenticity
of the resolutions authorizing the transactions contemplated by this
Agreement, and the authenticity and continuing validity of the charter
documents delivered pursuant to Subsection 3.01;
(f) an estoppel certificate from Capp Industries
Limited Partnership consenting to the acquisition of the Shares by the
Buyer and the other transactions contemplated hereby, and representing
that there are no outstanding claims against the Company or such
Subsidiary under the Lease for 6901 West Old Shakopee Road,
Bloomington, MN 55438;
(g) written resignations of all members of the
Company's Board of Directors;
(h) the original corporate minute books of the Company
and all corporate seals;
(i) a current certificate of occupancy for the
Chanhassen Property, to the extent then available, from the applicable
Governmental Entity;
(j) any elections or forms required to be delivered by
the Stockholder pursuant to Section 12 hereof; and
(k) a cross receipt executed by the Buyer and the
Stockholder.
9. Conditions to Obligations of the Stockholder
The obligations of the Stockholder under this Agreement are
subject to the fulfillment, at the Closing Date, of the following
conditions precedent, each of which may be waived in writing in the
sole discretion of the Stockholder:
9.01 Continued Truth of Representations and Warranties of the
Buyer; Compliance with Covenants and Obligations. The representations
and warranties of the Buyer in this Agreement shall be true on and as
of the Closing Date as though such representations and warranties were
made on and as of such date, except for any changes consented to in
writing by the Stockholder. The Buyer shall have performed and complied
with all terms, conditions, covenants, obligations, agreements and
restrictions required by this Agreement to be performed or complied
with by it prior to or at the Closing Date.
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9.02 Performance by the Buyer. At the Closing, the Buyer
shall have delivered to the Stockholder a certificate signed by each of
the Senior Vice President and the Secretary of the Buyer as to its
compliance with Subsection 9.01 hereof.
9.03 Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Buyer to authorize
or carry out this Agreement shall have been taken.
9.04 HSR Act. The waiting period under the HSR Act shall have
expired or been terminated.
9.05 Consents of Third Parties. The Buyer shall have received
all requisite consents and approvals of all third parties whose consent
or approval is required in order for the Buyer to consummate the
transactions contemplated by this Agreement, including, without
limitation, those set forth on Schedule 4.03 attached hereto.
9.06 Opinion of Counsel. The Stockholder shall have received
an opinion of Hale and Dorr, counsel to the Buyer, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit C,
and as to such other matters as may be reasonably requested by the
Stockholder or its counsel.
9.07 Closing Deliveries. The Stockholder shall have received
at or prior to the Closing such documents, instruments or certificates
as the Buyer may reasonably request including, without limitation:
(a) such certificates of the Buyer's officers and such
other documents evidencing satisfaction of the conditions specified in
this Section 9 as the Stockholder shall reasonably request;
(b) a certificate of the Secretary of State of the
State of Delaware as to the legal existence and good standing
(including tax) of the Buyer in Delaware;
(c) a certificate of the Secretary of the Buyer
attesting to the incumbency of the Buyer's officers, the authenticity
of the resolutions authorizing the transactions contemplated by this
Agreement, and the authenticity and continuing validity of the charter
documents and by-laws delivered pursuant to Subsection 4.01;
(d) payment of the Base Purchase Price; and
(e) a cross receipt executed by the Buyer and the
Stockholder.
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10. Indemnification
10.01 By the Stockholder. If the Closing occurs, the
Stockholder hereby agrees, subject to the provisions of this Section
10, to indemnify and hold harmless the Buyer and the Company from and
against all claims, damages, losses and liabilities, and all reasonable
costs and expenses (including, without limitation, settlement costs and
any legal, accounting or other expenses for investigating or defending
any actions or threatened actions which are subject to this Section 10)
(collectively, the "Losses") in connection with each and all of the
following:
(a) any misrepresentation or breach of any
representation or warranty made by the Stockholder or the Company in
this Agreement, in any Exhibit or Schedule attached hereto, or in any
certificate furnished by the Stockholder or the Company pursuant to
Section 8 of this Agreement;
(b) any breach of any covenant, agreement or
obligation of the Stockholder or the Company contained in this
Agreement or any other agreement, instrument or document executed in
connection with this Agreement;
(c) any violation on or prior to the Closing Date by
the Company of, or any failure on or prior to the Closing Date by the
Company to comply with, any Environmental Law or Environmental Permit
requirement applicable solely to on-site operations at the Chanhassen
Property, whether or not any such violation or failure to comply has
been disclosed to the Buyer;
(d) any claim brought against the Company under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, or any analogous Minnesota statute, arising from the
improper disposal of any material or waste, or the actual or alleged
release or threatened release of any waste or material to the
environment, including, without limitation, wastes, contaminants,
pollutants, hazardous wastes, solid wastes and hazardous substances or
materials, to the extent the claim relates to or involves an event
which occurred or existed, in whole or in part, on or before the
Closing Date;
(e) any claim relating to any assets sold (other than
products sold in the ordinary course of business) set forth on Schedule
10.01(e) attached hereto by the Company prior to the Closing Date;
(f) any Tax liabilities or obligations of the Company;
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(g) any claims against, or liabilities or obligations
of, the Company with respect to obligations under Group Employee
Benefit Plans (excluding any Company Benefit Plans) and the Deferred
Compensation Plan referred to in Subsection 11.03 hereof; and
(h) any claims arising on or prior to the Closing Date
against the BellSouth Corporation Employee Benefits Health Care Trust
(the "Health Care Trust") for dental benefits under the Dataserv, Inc.
Dental Plan (the "Dental Plan") in an amount in excess of the VEBA
Contribution.
10.02 By the Buyer. If the Closing occurs, the Buyer hereby
agrees, subject to the provisions of this Article 10, to indemnify and
hold harmless the Stockholder from and against all Losses in connection
with each and all of the following:
(a) any misrepresentation or breach of any
representation or warranty made by Buyer in this Agreement, in any
Exhibit or Schedule attached hereto or in any certificate furnished by
the Buyer pursuant to Section 8 of this Agreement;
(b) any breach of any covenant, agreement or
obligation of Buyer contained in this Agreement or any other agreement,
instrument or document executed in connection with this Agreement;
(c) any claims arising on or prior to the Closing Date
against the Health Care Trust for dental benefits under the Dental
Plan; and
(d) litigation suits, actions, proceedings or matters
set forth on Schedule 3.07.
10.03 Claims for Indemnification. In order to seek
indemnification under this Section 10, the party entitled to
indemnification (the "Indemnified Party"), shall, promptly after
obtaining knowledge of any claim against, or Loss by, the Indemnified
Party as to which indemnification may be sought, notify the
indemnifying party (the "Indemnifying Party") of such claim and, when
or to the extent known, the facts constituting the basis for such
claim. In the event of any such claim for indemnification hereunder
resulting from or in connection with any claim or legal proceedings by
a third party, the notice shall be delivered within twenty (20)
business days after receipt, shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom and shall
have attached to such notice all material pleadings, correspondence and
other materials related to such claim, the absence of which attachment
shall not, however, impair the Indemnified Party's rights hereunder.
The Indemnified
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Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior
written consent, which shall not be unreasonably withheld or delayed,
of the Indemnifying Party; provided, however, that if suit shall have
been instituted against the Indemnified Party and the Indemnifying
Party shall not have taken control of such suit after notification
thereof as provided in Subsection 10.04 of this Agreement, the
Indemnified Party shall have the right to settle or compromise such
claim in accordance with Subsection 10.04.
10.04 Defense by the Indemnifying Party.
(a) In connection with any claim which may give rise
to indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person other than the Indemnified Party, the
Indemnifying Party, at its sole cost and expense, may, upon written
notice to the Indemnified Party, assume the defense of any such claim
or legal proceeding if the Indemnifying Party acknowledges to the
Indemnified Party in writing the obligation of the Indemnifying Party
to indemnify the Indemnified Party with respect to all elements of such
claim. If the Indemnifying Party assumes the defense of any such claim
or legal proceeding, the Indemnifying Party shall select counsel
reasonably acceptable to the Indemnified Party to conduct the defense
of such claims or legal proceedings and at the sole cost and expense of
the Indemnifying Party shall take all steps reasonably necessary in the
defense or settlement thereof. The Indemnifying Party shall not consent
to a settlement of, or the entry of any judgment arising from, any such
claim or legal proceeding, without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld or
delayed). The Indemnified Party shall be entitled to participate in
(but not control) the defense of any such action, with its own counsel
and at its own expense.
(b) If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom within
thirty (30) business days after the date notice of such claim is
delivered by the Indemnified Party to the Indemnifying Party as set
forth above: (i) the Indemnified Party may defend against such claim or
litigation in such manner as it may deem appropriate, including, but
not limited to, settling such claim or litigation, on such terms as the
Indemnified Party may reasonably deem appropriate, and (ii) the
Indemnifying Party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its own
expense. The Indemnified Party's determination as to the manner of the
defense of such third party claim or the amount or nature of any such
settlement shall be binding on the Indemnifying Party.
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(c) The parties hereto shall furnish the party
assuming the defense of any action or legal proceeding pursuant to this
Subsection 10.04 in reasonable detail such information as such parties
may have with respect to such action or legal proceeding (including
copies of any summons, complaint or other pleading which may have been
served on such party and any written claim, demand, invoice, billing or
other document evidencing or asserting the same) and the parties hereto
shall make available to the party assuming the defense of any action or
legal proceeding pursuant to this Subsection 10.04 and its
representatives all records and other similar materials which are
reasonably required in the defense of such action or legal proceeding
and shall otherwise cooperate with and assist the party assuming the
defense of any action or legal proceeding pursuant to this Subsection
10.04 in the defense of such action or legal proceeding.
(d) In the event that the Indemnified Party assumes
the defense of any action or legal proceeding, the costs of counsel
included in the indemnifiable Losses shall be limited to the reasonable
costs and expenses of only one legal firm, except as otherwise agreed
by the parties.
10.05 Payment of Indemnification Obligation. Any amount
payable pursuant to Section 10 shall be effected by payment of cash or
delivery of a cashier's or certified check in the amount of the
indemnification liability, on or before the fifth business day after
the final resolution, by agreement or otherwise, of the applicable
indemnification claim.
10.06 Survival of Representations and Agreements;
Claims for Indemnification.
(a) All representations and warranties and all
covenants, agreements and obligations made by the Stockholder and the
Company in this Agreement, in any Exhibit or Schedule thereto, or in
any certificate furnished in connection with Section 8 of this
Agreement shall survive the Closing and any investigation at any time
made by or on behalf of the Buyer. All such representations and
warranties (but not the covenants, agreements and other obligations set
forth in Sections 11, 12, 14, 20 and 21 of this Agreement) shall expire
on October 31, 1997, except that (i) the representations and warranties
of the Stockholder set forth in Section 2 and the Stockholder and the
Company set forth in Subsections 3.1, 3.2 and 3.4 shall survive the
Closing indefinitely; (ii) the representations and warranties of the
Stockholder set forth in Subsections 3.13, 3.15 and, insofar as the
representations and warranties set forth in Subsection 3.22 relate to
Group Employee Benefit Plans, 3.22 and Section 12 (including the
covenants, agreements and obligations set forth in Section 12) shall
survive the Closing until expiration of all, if
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any, applicable statutes of limitation, provided that the
representations and warranties set forth in Subsection 3.13 shall
survive the Closing until the sixth anniversary of the Closing Date;
(iii) the representations and warranties of the Stockholder and the
Company set forth in Subsection 3.19, insofar as they relate to laws
which are not the specific subject of another representation or
warranty, shall survive the Closing until the earlier to occur of (A)
the expiration of all, if any, applicable statutes of limitations or
(B) the third anniversary of the Closing Date; (iv) the indemnity
agreements set forth in clause (c) of Subsection 10.01 shall survive
the Closing until expiration of all, if any, applicable statutes of
limitation; (v) the indemnity agreements set forth in clause (d) of
Subsection 10.01 shall survive the Closing until the tenth anniversary
of the Closing Date; and (vi) the indemnity agreements set forth in
clauses (e), (f), (g) and (h) of Subsection 10.01 shall survive the
Closing until the expiration of all, if any, applicable statutes of
limitation. Any claim based upon fraud or a willful misrepresentation
by the Stockholder or the Company shall survive the Closing subject to
the applicable statutes of limitation. Any claims asserted in writing
prior to the expiration of the representation, warranty or agreement
that is the basis for such claim, if any, as provided in this
Subsection 10.06, shall survive for purposes of such claim until such
claim is finally resolved and satisfied in full.
(b) All representations and warranties and all
covenants, agreements and obligations made by the Buyer in this
Agreement or in any certificate furnished pursuant to Section 8 of this
Agreement, shall survive the Closing and any investigation made by or
on behalf of the Stockholder. All such representations and warranties
(but not the covenants, agreements and other obligations) shall expire
on October 31, 1997, except that the indemnity agreements set forth in
clauses (c) and (d) of Subsection 10.02 shall survive the Closing until
expiration of all applicable statutes of limitation.
10.07 Limitations. Notwithstanding anything to the
contrary herein:
(a) the Stockholder shall be liable under this Section
10 for only that portion of the aggregate Losses which exceeds
$250,000, except that such limitation shall not apply and the
Stockholder shall be liable for (i) all Losses arising out of or
related to misrepresentations and breaches of the representations and
warranties of the Stockholder contained in Section 2 and the
Stockholder and the Company in Subsections 3.15 and, insofar as the
representations and warranties set forth in Subsection 3.22 relate to
Group Employee Benefit Plans, 3.22 and Section 12 (including the
covenants, agreements and other
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obligations set forth in Section 12) and (ii) all Losses arising out of
or related to any fraudulent or willful misrepresentation or fraudulent
or willful breach of the representations or warranties contained in
Section 3;
(b) The aggregate liability of the Stockholder in
respect to the matters set forth in this Section 10 shall not exceed
the Adjusted Purchase Price, except that such limitation shall not be
applicable to Losses arising out of or related to (i) any
misrepresentation or breach of warranty or representation set forth in
Section 2 and Subsections 3.15 and, insofar as the representations and
warranties set forth in Subsection 3.22 relate to Group Employee
Benefit Plans, 3.22 and Section 12 (including the covenants, agreements
and other obligations set forth in Section 12) hereof, (ii) any
fraudulent or willful misrepresentation or fraudulent or willful breach
of any warranty and representation contained in Sections 2 or 3 hereof,
or (iii) the indemnity agreements set forth in clauses (c), (e), (f),
(g) and (h) of Subsection 10.01;
(c) The Stockholder's aggregate liability for Losses
solely arising out of or related to the indemnity agreements set forth
in clause (d) of Subsection 10.01 shall be reduced on the first day
after each anniversary of the Closing Date by an amount equal to ten
percent (10%) of the Adjusted Purchase Price until reduced to zero; and
(d) The Buyer's aggregate liability for Losses arising
out of the indemnity agreement set forth in clause (c) of Subsection
10.02 shall not exceed the amount of the VEBA Contribution.
10.08 Exclusive Remedy. Except for remedies that cannot be
waived as a matter of law, including, without limitation, claims under
applicable state and federal securities' laws, the indemnification
obligations under this Section 10 and the indemnities and procedures
set forth in Sections 11, 12, 14, 20 and 21, if applicable, shall be
the sole and the exclusive remedy of the parties hereto with respect to
any breach of any representation, warranty, covenant or agreement under
this Agreement, or any Exhibit or Schedule thereto, by any party hereto
or any certificate delivered pursuant to Section 8 herewith, except
that nothing herein shall be construed or interpreted as limiting or
impairing the rights or remedies that the parties hereto may have at
equity for injunctive relief or specific performance. To the extent
that any provisions of this Section 10 are inconsistent with the
provisions of Section 12, the provisions of Section 12 shall have
precedence.
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10.09 Cure. No party shall be entitled to indemnification
under this Section 10 with respect to any claim if the Indemnifying
Party, within thirty (30) days after its receipt of the notice from the
Indemnified Party required by Section 10.03, cures or corrects the set
of facts which form the basis for such claim and the Indemnified Party
does not incur any Losses with respect to such claim.
10.10 Recoveries. The determination of any amounts
indemnifiable under this Section 10 shall take into account: (a) the
net tax benefit with respect to such indemnified claim received by the
Indemnified Party; and (b) any other recovery or benefit with respect
to such indemnified claim received by the Indemnified Party from any
other person or entity or Governmental Entity, net of any expenses
actually incurred in obtaining such recovery or benefit. If an
Indemnified Party later receives such a recovery or benefit after
receipt of payment from the Indemnifying Party pursuant to this Section
10, then the amount of such recovery or benefit, after taking into
account the effect of the preceding sentence, shall be paid to the
Indemnifying Party. The parties agree that to the maximum extent
allowable under applicable Tax laws, amounts payable pursuant to
Section 10 shall be treated (and reported on all applicable Tax
Returns) as adjustments to the purchase price payable by the Buyer to
the Stockholder for the Shares.
11. Post-Closing Agreements
The Stockholder agrees that from and after the Closing Date:
11.01 Confidentiality.
(a) As used in this Subsection 11.01, the term
"Confidential Information" means any information, technical data or
know-how of a party and its Affiliates, including, without limitation,
that which relates to such party's business plans, financial plans and
projections; pending and proposed acquisitions, securities offerings
and financings; joint ventures; research and development; products and
product plans, system design and construction plans; operational and
hiring matters; accounting; customers; developments; inventions;
processes; designs and engineering; marketing, sales and pricing; and
finances; that (i) is disclosed by or on behalf of such party to the
other party, or (ii) is produced, developed or learned in connection
with the working relationship between the parties and any information,
technical data or know-how that contain or reflect any of the
foregoing, whether prepared by either party or by any other person or
entity. Confidential Information does not include information,
technical data or know-how that (x) (1) was
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in the possession of the receiving party prior to the time of
disclosure; (2) is independently developed by the receiving party
without reference to or reliance upon any Confidential Information; (3)
prior to or after the time of disclosure becomes generally available to
the public, not as a result of any breach of this Agreement by the
receiving party or its employees, directors, officers, attorneys,
lenders, advisors or agents; or (4) is lawfully acquired by the
receiving party from sources other than the other party and not known
by the receiving party to be subject to a confidentiality agreement by
which either party is bound; or (y) is approved by the disclosing party
in writing for release; provided, however, that from and after the
Closing Date the Confidential Information of the Buyer entitled to
protection under this Subsection 11.01 shall include any of the
foregoing that constitutes Confidential Information of the Company
prior to Closing. In such case, the Stockholder shall be deemed to be
the receiving party of such Confidential Information and exclusion
(x)(1) set forth in the preceding sentence shall not be available to
the Stockholder.
(b) Each party agrees to hold all Confidential
Information of the other party in confidence and not to use any
Confidential Information of the other party for any purpose except in
connection with the transactions contemplated hereby. Each party will
not copy any Confidential Information except for such use or disclose
any Confidential Information of the other party to any other person or
entity except (i) to its employees, directors, officers, attorneys,
lenders, advisors and agents who are required to have the information
in connection with the transactions contemplated hereby (it being
agreed that each party shall direct all such persons or entities to
comply with the disclosure limitations of this Agreement and that the
receiving party shall be responsible for any breach of this Agreement
by such persons or entities) and (ii) as expressly provided by
paragraph (c) of this Subsection 11.01 below. Each party agrees that it
will take all reasonable measures to protect the secrecy of and avoid
disclosure or use of Confidential Information of the other party in
order to prevent it from falling into the public domain or the
possession of persons or entities other than those persons or entities
authorized hereunder to have such information, which measures shall
include, without limitation, the same degree of care that such party
utilizes to protect its own confidential information of a similar
nature. Each party agrees to notify the other party promptly in writing
of any misuse or misappropriation of Confidential Information of the
other party that may come to its attention.
(c) If the receiving party becomes legally compelled
(by request for documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential
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Information, the receiving party shall provide the other party with
prompt prior written notice of such requirement so that such party may
seek a protective order or other appropriate remedy and/ or waive
compliance with the terms of this Agreement. If such protective order
or other remedy is not obtained, the receiving party agrees to furnish
only that portion of the Confidential Information that such party is
advised by written opinion of counsel is legally required and to
exercise its reasonable efforts to obtain assurance that confidential
treatment will be afforded such Confidential Information.
(d) All Confidential Information of a party in
whatever form shall at all times remain the property of such party.
Upon the written request of either party, the other party shall deliver
promptly to the requesting party all documents, memoranda, notes,
computer programs, disks, hard drives, tapes, other storage media,
materials and other tangible property, including any copies thereof
("Information Media") that relate to the requesting party's
Confidential Information, including any such Information Media prepared
by or on behalf of the receiving party, and shall not retain any
copies, extracts or other reproductions or evidence in whole or in part
of the requesting party's Confidential Information; provided, however,
that notwithstanding the foregoing, the Buyer acknowledges that the
Company is part of the BellSouth consolidated group and that the
Stockholder and its Affiliates may retain copies of such Confidential
Information solely (i) in order to comply with applicable law or (ii)
as part of BellSouth's historical records. All such Confidential
Information stored on Information Media that cannot be delivered to the
requesting party (because, for example, such media also contain
information relating to the other party) shall be destroyed promptly,
and such destruction shall be certified in writing to the requesting
party by an authorized officer of the other party who supervised such
destruction. The provisions of the preceding sentence shall not apply
to any Confidential Information related to the Company that the
Stockholder and/or its Affiliates are entitled to retain pursuant to
this Agreement. The rights and obligations of the parties under this
Section 11.01 shall survive any such delivery of Confidential
Information and any termination of this Agreement until the second
anniversary of the date of this Agreement.
(e) If (i) the employment of an officer, director or
other employee of the Stockholder or any Affiliate thereof, to whom
Confidential Information concerning the business of the Company has
been disclosed, is terminated and (ii) such individual is subject to an
obligation to maintain such Confidential Information in confidence
after such termination, the Stockholder shall, upon request by the
Buyer, take all reasonable
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steps at its expense to enforce such confidentiality obligation in the
event of an actual or threatened breach thereof.
(f) Each party agrees that its obligations provided
herein are necessary and reasonable in order to protect the other party
and its business, and each party expressly agrees that monetary damages
would be inadequate to compensate the other party for any breach by
such party of its covenants and agreements set forth herein.
Accordingly, each party agrees and acknowledges that any such violation
or threatened violation will cause irreparable injury to the other
party and that, in addition to any other remedies that may be
available, in law, in equity or otherwise, each party shall be entitled
to obtain injunctive relief against the threatened breach of this
Subsection 11.01 or the continuation of any such breach by the other
party, without the necessity of proving actual damages or posting a
bond. Each party agrees that no failure or delay by the other party in
exercising any remedy under this Subsection 11.01 shall operate as a
waiver hereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any
other remedy.
11.02 No Solicitation or Hiring of Former Employees. Except
as provided by law, for a period of two (2) years after the Closing
Date, neither the Stockholder nor any Affiliate thereof shall (a)
solicit any person who was an employee of the Company on the date
hereof or the Closing Date (unless terminated by the Buyer within seven
months after the Closing Date) to terminate his employment with the
Buyer or the Company, as the case may be, or to become an employee of
the Stockholder or an Affiliate, or (b) hire any person who was such an
employee on the date hereof or on the Closing Date without the prior
written consent of the Buyer, which consent shall not be unreasonably
withheld.
11.03 Deferred Compensation. The Stockholder hereby assumes
all liabilities and obligations of the Company under, and agrees to
indemnify and hold the Buyer, the Company harmless from and against all
losses, claims and damages arising out of or relating to, the BellSouth
Nonqualified Deferred Income Plan and Trust Under Executive Benefit
Plan(s) for Certain BellSouth Companies, as such Plan and Trust are
currently in effect and are in effect in the future.
11.04 Use of BellSouth Marks and Names. Within 120 days of
the Closing Date, the Company shall discontinue all use by such persons
of all tradenames, trademarks, service names and service marks (whether
registered or not) of BellSouth Corporation ("BellSouth") and its
Affiliates (other than those owned by the Company), and shall destroy,
or affix stickers or other material
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covering the relevant portion of, all printed material bearing any of
such marks and names. The Company hereby acknowledges that all rights
in and to such names and marks and the goodwill connected therewith
shall remain the sole property of BellSouth. After the Closing, and
except as provided in the preceding sentence, the Company will not
adopt or use, for any purpose, any of the foregoing trademarks, service
marks, tradenames or service names or any names or marks that are
confusingly similar thereto.
11.05 Non-Competition Agreement
(a) For a period of two (2) years following the
Closing Date, the Stockholder and its Affiliates shall not provide
Maintenance Services (as defined below) in the United States or Mexico.
The Stockholder agrees that if it or one of its Affiliates proposes to
directly provide or have a third party provide as a subcontractor to
the Stockholder, or one of its Affiliates, Maintenance Services in the
United States or Mexico, the Stockholder or the Affiliate shall give
the Buyer written notice of the proposed service arrangement and
required response time and form of response and the Buyer shall have
the right to provide the Maintenance Services as a subcontractor to the
Stockholder or the Affiliate in connection with such service
arrangement. The Company and the Buyer and the Stockholder or the
Affiliate will negotiate in good faith to reach an agreement for the
provision of Maintenance Services by the Buyer as a subcontractor to
the Stockholder or the Affiliate. In the event the Buyer and the
Stockholder or its Affiliate do not reach an agreement for the Buyer to
provide Maintenance Services in a proposed service arrangement prior to
the required response time, the Stockholder or its Affiliate may not
provide such proposed Maintenance Services.
(b) Notwithstanding the foregoing, the Stockholder or
its Affiliate shall be entitled to provide such Maintenance Services
(i) if the Buyer is unable to meet commercially reasonable
specifications, including competitive pricing, and/or requirements
established by the Stockholder or its Affiliate in good faith and/or
the customer, or (ii) if after the Stockholder's or its Affiliate's
compliance with the procedures set forth above, the customer seeking
the Maintenance Services rejects the Buyer as the provider of such
Maintenance Services. Also, notwithstanding the foregoing, this
covenant shall not apply to (i) Maintenance Services provided by the
Stockholder to one of its Affiliates, by one of such Affiliates to the
Stockholder, or by one Affiliate to another Affiliate, (ii) the
provision of Incidental Maintenance Services (as defined below) by the
Stockholder and/or its Affiliates, (iii) Maintenance Services provided
to state lotteries in Alabama, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina
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and Tennessee (the "Stockholder's Region"), and (iv) Maintenance
Services for any goods directly sold and installed by the Stockholder
or its Affiliates.
(c) For a period of two (2) years after the Closing
Date, the Stockholder and its Affiliates will not solicit AllState
Insurance Company, State Farm Insurance Company or K-Mart Corporation
for Maintenance Services or, in the event such services are currently
being performed by the Company or the Buyer for any of such companies,
Help Desk or Integration Services.
(d) For a period of two (2) years after the Closing
Date, (i) the Stockholder and its Affiliates shall not take any action
to cause the customers set forth on Schedule 11.05(d)(i) attached
hereto (to whom the Company is providing Company Services (as defined
below) as of the Closing Date) to divert such existing Company Services
to the Stockholder or its Affiliates or to any third party and (ii) the
Company, the Buyer and their Affiliates shall not take any action to
cause the customers set forth on Schedule 11.05(d)(ii) attached hereto
(to whom the Stockholder or its Affiliates are providing Maintenance
Services as of the Closing Date) to divert such Maintenance Services to
the Company, the Buyer or their Affiliates.
(e) The parties hereto agree that the duration and
geographic scope of the non-competition provision set forth in this
Subsection 11.05 are reasonable. In the event that any court of
competent jurisdiction determines that the duration or the geographic
scope, or both, are unreasonable and that such provision is to that
extent unenforceable, the parties hereto agree that the provision shall
remain in full force and effect for the greatest time period and in the
greatest areas that would not render it unenforceable. The parties
intend that this non-competition provision shall be deemed to be a
series of separate covenants, one for each and every county of each and
every state of the United States of America and each and every
political subdivision of each and every country outside the United
States of America where this provision is intended to be effective.
Each party agrees that damages are an inadequate remedy for any breach
of this provision and that the party alleging a breach shall, whether
or not it is pursuing any potential remedies at law, be entitled to
equitable relief in the form of preliminary and permanent injunctions
without bond or other security upon any actual or threatened breach of
this non-competition provision.
(f) For purposes of this Agreement:
(i) "Company Services" shall mean Maintenance
Services, Integration and Help Desk Services.
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(ii) "Help Desk Services" shall mean the provision
of service call processing for customers and customer service
representatives, which includes (A) isolation and/or resolution of
software, hardware and private network-related problems and (B) vendor
management.
(iii) "Incidental Maintenance Services" shall mean
Maintenance Services comprising less than 10% per bid or contract
within the Stockholder's Region and less than $200,000 per bid or
contract outside the Stockholder's Region, which are incidental to the
provision of Telecommunications Products and Services (as defined
below), such that the provision of the Telecommunications Products and
Services is the primary focus of the contract.
(iv) "Integration" shall mean the installation or
integration of personal computer hardware or private networks, such as
local area networks or wide area networks, including the administration
of such networks.
(v) "Maintenance Services" shall mean the
maintenance (including preventive maintenance) and hardware support of
personal computer hardware equipment and related peripherals and
related applications servers and related software, and shall not
include the maintenance of Telecommunications Products (as such term is
included in the definition of Telecommunications Products and Services
below).
(vi) "Telecommunications Products and Services" are
items such as hubs, routers, PBX equipment, multimedia, video, audio,
alarm monitoring, wireless and personal communications products and
services, voice and data networks, wide area networks, Internet servers
and related equipment and software.
11.06 Certain Accounting Matters. The Stockholder agrees to
provide the Buyer with all necessary audited and unaudited historical
financial information with respect to the Stockholder for periods prior
to the Closing Date which may be necessary to complete the Buyer's
required filings under the Securities Exchange Act of 1934, as amended,
with the Securities and Exchange Commission (the "SEC"). The
Stockholder further agrees to use its commercially reasonable efforts
to obtain for the Buyer from the Stockholder's Auditors any consents
necessary for purposes of inclusion or incorporation by reference of
the reports of the Stockholder's Auditors on the historical audited
financial statements referred to above in any registration statement
subsequently filed by the Buyer with the SEC. The Stockholder will also
use its commercially reasonable efforts to cause the Stockholder's
Auditors to make available its workpapers related to
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its audits of the Stockholder's financial statements to the Buyer's
Auditors to the extent considered necessary by the Buyer's Auditors, as
is customary and normal between predecessor and successor auditors.
12. Certain U.S. Tax Matters.
12.01 All tax sharing agreements or similar arrangements with
respect to or involving the Company shall be terminated prior to the
Closing Date, and, after the Closing Date, the Company shall not be
bound thereby nor have any liability thereunder for amounts due in
respect of periods prior to the Closing Date.
12.02 No new separate written elections with respect to
Taxes, or any changes in current elections with respect to Taxes,
affecting the Company shall be made after the date of this Agreement
without the prior written notification of the Buyer.
12.03 The Stockholder shall furnish Buyer with an affidavit,
stating, under penalty of perjury, the transferor's United States
taxpayer identification number and that the transferor is not a foreign
person pursuant to Section 1445(b)(2) of the Code.
12.04 The Stockholder and the Buyer shall (a) each provide
the other, and Buyer and the Stockholder shall cause the Company to
provide either of them, with such assistance as may reasonably be
requested by any of them in connection with the preparation of any Tax
Return, audit or other examination by any taxing authority or judicial
or administrative proceedings relating to liability for Taxes, (b) each
retain and provide the other, and the Buyer and the Stockholder shall
cause the Company to retain and provide the Buyer and the Stockholder,
with any records or other information which may be relevant to such Tax
Return, audit or examination, proceeding or determination, and (c) each
provide the other with any final determination of any such audit or
examination, proceeding or determination that affects any amount
required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, the Buyer and the
Stockholder shall retain, and shall cause the Company to retain, until
the applicable statutes of limitations (including any extensions) have
expired, copies of all Tax Returns, supporting work schedules and other
records or information which may be relevant to such Returns for all
tax periods or portions thereof ending before or including the Closing
Date and shall not destroy or otherwise dispose of any such records
without first providing the other party with a reasonable opportunity
to review and copy the same.
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12.05 The Stockholder shall join with the Buyer in making an
election under Section 338(h)(10) of the Code (and any corresponding
elections under state, local or foreign tax law) with respect to the
Company (a "Section 338(h)(10) Election"). The Stockholder and the
Buyer shall cooperate fully with each other in the making of such
Section 338(h)(10) Election, including the determination of the
allocation of the adjusted grossed-up basis among the Company's assets
as required by Section 338. In particular, and not by way of
limitation, (i) in order to effect such Section 338(h)(10) Election,
the Stockholder and the Buyer shall jointly execute Internal Revenue
Service Form 8023-A on or prior to the Closing Date and (ii) at least
30 days prior to the filing of such Election, Buyer shall deliver the
proposed allocation of the adjusted grossed-up basis to the Stockholder
for its review. Such Form 8023-A and all attachments required to be
filed therewith pursuant to applicable Treasury Regulations shall be
held by the Buyer and shall be filed by the Buyer in accordance with
Section 338 of the Code and the regulations thereunder. The Buyer shall
deliver to the Stockholder a copy of Form 8023-A and attachments as
filed with the IRS within fifteen days of such filing. The Stockholder
and the Buyer agree to report the transaction for tax purposes in a
manner consistent with the making of such Election.
12.06 The Stockholder shall indemnify and hold the Buyer and
the Company and any successor corporations thereto harmless, on an
after-tax basis, from and against the following Taxes with respect to
the Company to the extent such Taxes exceed the accruals and reserves
for Taxes set forth on the Closing Balance Sheet (excluding any assets,
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income):
(i) Any and all Taxes for any taxable period ending (or
deemed, pursuant to Subsection 12.11, to end) on or before the
Closing Date due and payable by the Company;
(ii) Any liability of the Company under Treasury
Regulation Section 1.1502-6 or under any comparable or similar
provision under state, local or foreign laws or regulations for
periods ending on or prior to the Closing Date; and
(iii) Any Taxes of the Company required to be paid by
reason of the Section 338(h)(10) Election in respect of the
Shares.
12.07 Amounts payable pursuant to Subsection 12.06 shall be
computed after taking into account all Tax consequences to the Buyer of
(i) the receipt of (or the right to receive) the indemnification
payment and (ii) the incurrence of the liability
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that gave rise to the right to receive the indemnification payment.
Thus it is the intention of the parties that the Buyer be held harmless
with respect to the liability that gave rise to the right to the
indemnification payment on an after-Tax basis. The parties agree that
to the maximum extent allowable under applicable Tax laws, amounts
payable to the Buyer pursuant to Subsection 12.06 shall be treated (and
reported on all applicable Tax Returns) as adjustments to the purchase
price payable by the Buyer to the Stockholder for the Shares.
12.08 The Buyer shall indemnify and hold the Stockholder and
any successor corporations thereto harmless, on an after-tax basis,
from and against any and all Taxes (a) for any taxable period beginning
(or deemed pursuant to Subsection 12.11 to begin) after the Closing
Date, due or payable by the Company or the Stockholder or (b) resulting
from any action taken by the Buyer (or the Company), other than an
action required by law, without the Stockholder's written consent,
after the Closing Date or outside the ordinary course of business on
the Closing Date.
12.09 Amounts payable pursuant to Subsection 12.08 shall be
computed after taking into account all Tax consequences to the
Stockholder of (i) the receipt of (or the right to receive) the
indemnification payment and (ii) the incurrence of the liability that
gave rise to the right to receive the indemnification payment. Thus it
is the intention of the parties that the Stockholder be held harmless
with respect to the liability that gave rise to the right to the
indemnification payment on an after-Tax basis.
12.10 The Buyer and the Stockholder agree that if the Company
is permitted but not required under applicable foreign, state or local
Tax laws to treat the Closing Date as the last day of a taxable period,
the Buyer and the Stockholder shall treat such day as the last day of a
taxable period. The Buyer and the Stockholder agree that they will
treat the Company as if it ceased to be part of the Stockholder's
Consolidated Group as of the close of business on the Closing Date.
12.11 Any Taxes for a taxable period beginning before the
Closing Date and ending after the Closing Date with respect to the
Company shall be paid by the Buyer or the Company. The Taxes for such
period shall be apportioned between the Stockholder and the Buyer based
on the actual operations of the Company during the portion of such
period ending on the Closing Date and the portion of such period
beginning on the day following the Closing Date (except that
exemptions, allowances, or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned on
a per diem basis and real property taxes shall be allocated in
accordance with Section
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164(d) of the Code), and for purposes of Subsections 12.06 and 12.08,
each portion of such period shall be deemed to be a taxable period
(whether or not it is in fact a taxable period).
12.12 With respect to any Taxes referred to in
Subsection 12.11 hereof:
(i) Thirty days after the Closing Statement is agreed to
by the Buyer and the Stockholder or adopted pursuant to Subsection
1.03, the Buyer shall present the Stockholder with a schedule
detailing the computation of the Tax that would have been due for
the taxable period ending on the Closing Date if the Closing Date
were the last day of the taxable period (the "Hypothetical
Pre-Cut-Off Period Tax"), if applicable, provided that sufficient
information is available to complete such computation. In the
event that sufficient information is not available, Buyer shall
present the Stockholder with such computation not later than
thirty (30) days before the due date, as extended, prescribed for
filing the applicable Tax Return; and
(ii) Thirty (30) days after the Buyer presents the
Stockholder with the schedule described in clause (i) above, (A)
the Stockholder shall pay the Company the amount by which the
Hypothetical Pre-Cut-Off Period Tax exceeds the sum of any
estimated payments and accruals for Taxes made prior to the
Closing Date with respect to such Tax for the current taxable
year, or (B) the Company or the Buyer shall pay the Stockholder
the amount by which the sum of any estimated payments and accruals
for Taxes made prior to the Closing Date with respect to such Tax
for the current taxable year exceeds the Hypothetical Pre-Cut-Off
Period Tax.
12.13 The Stockholder shall prepare and file or shall cause
the Company to prepare and file all Tax Returns with respect to the
Company for any taxable period ending on or before the Closing Date
other than Returns for Taxes referred to in Subsection 12.11. If such
Tax Returns have not been prepared and filed on or before the Closing
Date, the Buyer shall cause the Company to cooperate with and assist
the Stockholder in the preparation and filing of such Tax Returns. The
Stockholder shall review, approve, and file such Tax Returns and
deliver copies of such returns as filed to the Buyer.
12.14 The Buyer shall, subject to the provisions of
Subsection 12.15, file all other Returns with respect to the Company.
12.15 With respect to any Tax Return for taxable periods
beginning before the Closing Date and ending after the
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Closing Date, the Buyer shall consult with the Stockholder concerning
each such Return and report all items with respect to the period ending
on the Closing Date in accordance with the instructions of the
Stockholder, unless otherwise agreed by the Stockholder and the Buyer;
provided, however, that if the Buyer is advised by counsel that the
filing of any Return and the reporting on such Return of any item in
accordance with the instructions of the Stockholder may subject the
Buyer or, the Company to any penalties or fines, the Buyer may file
such Return without regard to the Stockholder's instructions relating
to such item. The Buyer shall cause the Company to provide the
Stockholder with a copy of each proposed Return at least thirty (30)
days prior to the filing of such Return, and the Stockholder may
provide comments thereon, which comments shall be delivered within ten
(10) days of receiving such copies.
12.16 The Stockholder shall resolve, at its own expense, any
Tax audit with respect to the Company pending on the Closing Date (all
material information in respect of any such Tax audit is set forth on
Schedule 12.16 attached hereto), and shall have the right, at its own
expense, to control any other Tax audit, initiate any claim for refund,
contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any
and all Taxes for any taxable period ending on or before the Closing
Date with respect to the Company. The Buyer shall have the right, at
its own expense, to control any other Tax audit, initiate any other
claim for refund, and contest, resolve and defend against any other
assessment, notice of deficiency, or other adjustment or proposed
adjustment relating to Taxes with respect to the Company.
12.17 If the Buyer or the Company (as the case may be), on
the one hand, or the Stockholder, on the other, fails to provide any
information requested by the other party in the time specified herein,
or if no time is specified pursuant to this Section 12, within a
reasonable period, or otherwise fails to do any act required of it
under this Section 12, then the party failing to so provide the
information or do such act shall be obligated, notwithstanding any
other provision of this Agreement, to indemnify the party requesting
the information or act and shall so indemnify the requesting party and
hold such party harmless from and against any and all costs, claims or
damages, including, without limitation, all Taxes or deficiencies
thereof, payable as a result of such failure.
12.18 The Stockholder and the Buyer shall each be liable for
one-half of all sales, transfer, stamp, real property transfer, or real
property gains, and similar taxes arising out of or in connection with,
or attributable to the transactions effective pursuant to this
Agreement (the "Conveyance Taxes").
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The Stockholder shall file all Returns due in connection with the
Conveyance Taxes, including Returns that require a joint filing on
behalf of the Stockholder and the Buyer and the Company. Prior to
filing any such Returns, the Stockholder shall submit such Returns to
the Buyer for its review, comment and approval.
12.19 The Stockholder shall be entitled to an amount equal to
any refunds or credits of Taxes attributable to taxable periods (or
portions thereof, determined in accordance with Subsection 12.11)
ending on or before the Closing Date. The Buyer and the Company, as the
case may be, shall be entitled to any refunds or credits of Taxes
attributable to taxable periods (or portions thereof determined in
accordance with Subsection 12.11) beginning after the Closing Date. The
Buyer shall or shall cause the Company promptly to forward to the
Stockholder or to reimburse the Stockholder for any refunds or credits
due the Stockholder (pursuant to the terms of this Agreement) after
receipt thereof, and the Stockholder shall promptly forward to the
Buyer (pursuant to the terms of this Agreement) or reimburse the Buyer
for any refunds or credits due the Buyer after receipt thereof.
13. Termination of Agreement; Option to Proceed; Damages
13.01 Termination by Lapse of Time. This Agreement shall
terminate at 5:00 p.m., Boston time, on May 15, 1996, if the
transactions contemplated hereby have not been consummated, unless such
date is extended by the written consent of the Company, the Buyer and
the Stockholder.
13.02 Termination by Agreement of the Parties. This Agreement
may be terminated by the mutual written agreement of the parties
hereto. In the event of such termination by agreement, the Buyer shall
have no further obligation or liability to the Stockholder or the
Company under this Agreement, and the Stockholder shall have no further
obligation or liability to the Buyer under this Agreement.
13.03 Termination by Reason of Breach. This Agreement may be
terminated by the Stockholder, if at any time prior to the Closing
there shall occur a breach of any of the representations, warranties or
covenants of the Buyer or the failure by the Buyer to perform any
condition or obligation hereunder, and may be terminated by the Buyer,
if at any time prior to the Closing there shall occur a breach of any
of the representations, warranties or covenants of the Stockholder or
the Company or the failure of the Stockholder or the Company to perform
any condition or obligation hereunder.
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13.04 Earnest Money.
(a) If the Buyer defaults on the performance of its
obligations under this Agreement, and as a result thereof or any other
reason the Buyer is unable to consummate this Agreement in accordance
with the terms hereof, and the Stockholder is not then in material
default of any of its obligations hereunder, then the Stockholder shall
be entitled to retain the Earnest Money as liquidated damages. The
Purchaser and the Stockholder hereby agree that for purposes of this
Section 13.05(a), that (i) the Stockholder's damages for the Buyer's
default are difficult or impossible to determine, (ii) the Buyer's
payment of the Earnest Money is deemed a reasonable estimate of the
Stockholder's potential damages, and (iii) such payment is not a
penalty or forfeiture.
(b) If the Stockholder defaults in the performance of
its obligations under this Agreement, and as a result thereof is unable
to consummate this Agreement on the Closing Date in accordance with the
terms hereof, and if the Buyer is not then in material default of any
of its obligations hereunder, then the Buyer shall be entitled to the
return of the Earnest Money (without interest) immediately upon written
notice of termination of this Agreement by the Purchaser pursuant to
Subsection 13.03 above.
13.05 Availability of Remedies at Law. In the event this
Agreement is terminated by the Buyer or the Stockholder, pursuant to
the provisions of this Section 13 (other than pursuant to Subsection
13.02), the parties hereto shall have available to them all remedies
afforded to them by applicable law.
14. Brokers
14.01 For the Stockholder and the Company and the
Subsidiaries. Each of the Stockholder and the Company represent and
warrant that no person, firm or corporation has acted in the capacity
of broker or finder on its behalf to bring about the negotiation of
this Agreement. The Stockholder agrees to indemnify and hold harmless
the Buyer against any claims or liabilities asserted against it by any
person acting or claiming to act as a broker or finder on behalf of the
Stockholder or the Company.
14.02 For the Buyer. The Buyer represents and warrants that
no person, firm or corporation has acted in the capacity of broker or
finder on its behalf to bring about the negotiation of this Agreement,
other than Salomon Brothers, Inc. The Buyer agrees to pay all fees,
expenses and compensation owed to any person, firm or corporation who
has acted in the capacity of
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broker or finder on its behalf to bring about the negotiation of this
Agreement, including Salomon Brothers, Inc. The Buyer agrees to
indemnify and hold harmless the Stockholder against any claims or
liabilities asserted against it by any person acting or claiming to act
as a broker or finder on behalf of the Buyer.
15. Notices
Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent
by telex, overnight mail, registered or certified mail, postage
prepaid, addressed as follows or to such other address of which the
parties may have given notice:
To the Buyer: Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821-4130
Attention: Law Department -
General Counsel
With a copy to: Hale and Dorr
60 State Street
Boston, MA 02109
Attention: John A. Burgess, Esq.
To the Stockholder
or the Company: Dataserv, Inc.
c/o BellSouth Corporation
Suite 1700
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
Attention: Mr. Mark Feidler
and to:
BellSouth Corporation
Suite 1800
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
Attention: Kelly M. Romich, Esq.
Unless otherwise specified herein, such notices or other communications
shall be deemed received (a) on the date delivered, if delivered
personally, (b) one business day after being sent, if sent by telex or
overnight mail, or (c) three business days after being sent, if sent by
registered or certified mail.
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16. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns,
except that the Buyer, on the one hand, and the Stockholder and the
Company, on the other hand, may not assign their respective obligations
hereunder without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however, that the
Buyer may assign this Agreement, and its rights and obligations
hereunder, to a subsidiary or Affiliate of the Buyer. Any assignment in
contravention of this provision shall be void. No assignment shall
release the Buyer, the Stockholder or the Company from any obligation
or liability under this Agreement.
17. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits hereto, and
all agreements and instruments to be delivered by the parties pursuant
hereto represent the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and supersede
all prior oral and written and all contemporaneous oral negotiations,
commitments and understandings between such parties. The Buyer and the
Stockholder may amend or modify this Agreement, in such manner as may
be agreed upon, by a written instrument executed by the Buyer and the
Stockholder.
(b) If the provisions of any Schedule or Exhibit to this
Agreement are inconsistent with the provisions of this Agreement, the
provisions of the Agreement shall prevail. The Exhibits and Schedules
attached hereto or to be attached hereafter are hereby incorporated as
integral parts of this Agreement.
18. Severability
Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions
hereof in such jurisdiction or rendering that or any other provision of
this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
19. Investigation of the Parties
All representations and warranties contained herein which are
made to the knowledge of a party shall require that such party make
reasonable investigation and inquiry with respect thereto to ascertain
the correctness and validity thereof. For the purposes of this
Agreement "knowledge" (or any derivation
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thereof), as it relates solely to the Stockholder, shall mean the
actual knowledge of the directors or officers of the Stockholder after
reasonable inquiry.
20. Expenses
Except as otherwise expressly provided herein, the Buyer, on
the one hand, and the Stockholder, on the other hand, will pay all fees
and expenses (including, without limitation, legal and accounting fees
and expenses) incurred by them in connection with the transactions
contemplated hereby. In no event will any of the fees or expenses
incurred in connection with this transaction by the Stockholder,
including, without limitation, the fees and expenses of counsel to the
Stockholder, be billed to or paid by the Company.
21. Further Assurances.
At any time and from time to time after the Closing, each party to
this Agreement shall, at the request of another party hereto, execute
and deliver any further instruments and take such other action as may
reasonably be requested to confirm or otherwise carry out the intent
and purpose of this Agreement, including to put the Buyer in actual
possession and operating control of the assets, properties and business
of the Company.
22. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
23. Section Headings
The section headings are for the convenience of the parties
and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
24. Counterparts
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall
be one and the same document.
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25. Definitions
For purposes of this Agreement, each of the following defined
terms is defined in the Section of this Agreement indicated below.
Defined Term Section
Accounts Receivable 3.08
Adjusted Purchase Price 1.03(e)
Affiliate 25
Agreement Preamble
Audited Balance Sheets 3.05(a)(i)
Audited Financial Statements 3.05(a)(i)
Balance Sheet Date 3.05(b)
Base Purchase Price 1.02(a)
BellSouth 11.04
Buyer Preamble
Buyer's Auditors 1.03(b)
Chanhassen Lease 6.12
Chanhassen Property 6.02(l)(ii)
Chanhassen Transferee 6.12
Closing 1.01
Closing Date 1.03
Closing Statement 1.03(a)
Code 3.15(c)
Common Stock Preliminary Statement
Company Preamble
Company Employee Benefit Plan 3.22(a)
Company Environmental Matters 10.06(a)
Company Services 11.05(f)(i)
Confidential Information 11.01(a)
Consolidated Group 3.15(a)
Consumables 3.09(a)
Contracts 3.17(a)
Conveyance Taxes 12.18
Current Balance Sheet 3.05(a)(ii)
Current Financial Statements 3.05(a)(ii)
Customer Agreements 3.13(c)
Dataserv Mexico 3.05(c)
Defined Benefit Plans 3.22(a)
Dental Plan 10.01(h)
Disclosure Schedule 3
Dispute Notice 1.03(c)
Earnest Money 1.02(b)
Employee Benefit Plan 3.22(a)
Environmental Disposal Facility 3.20(g)
Environmental Law 3.20(a)
Environmental Permit 3.20(h)
Environmental Reports 3.20(f)
Environmental Transporter 3.20(g)
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ERISA 3.22(a)
ERISA Affiliate 3.22(a)
Excluded Intercompany Indebtedness 6.09
Field Spare Parts 3.09(a)
Financial Statements 3.05(b)
Governmental Entity 3.15(a)
Group Employee Benefit Plan 3.22(a)
Health Care Trust 10.01(h)
Help Desk Services 11.05(f)(ii)
HSR Act 1.05
Hypothetical Pre-Cut-Off Period Tax 12.12(i)
Incidental Maintenance Services 11.05(f)(iii)
Indemnified Party 10.03
Indemnifying Party 10.03
Information Media 11.01(d)
Initial Closing Statement 1.03(a)
Insurance Policies 3.24
Integration 11.05(f)(iv)
Intellectual Property 3.13(a)
Interim Financial Statements 3.05(b)
Inventory 3.09(b)
Knowledge 19
Leases 3.12
Losses 10.01
Maintenance Services 11.05(f)(v)
Material Adverse Effect 25
Monthly Balance Sheets 3.05(a)(iii)
Monthly Financial Statements 3.05(a)(iii)
Net Working Capital of the Company 1.03(e)(iii)
Neutral Auditor 1.03(c)
PBGC 3.22(a)
Permits 3.19
Personal Property 3.10
Security Interest 3.10
Section 338(h)(10) Election 12.05
SEC 11.06
September Inventory 3.09(a)
Shares Preliminary Statement
Significant Customers 3.26
Stockholder Preamble
Stockholder's Auditors 1.03(a)
Stockholder's Region 11.05(b)
Supplies 3.17(b)(v)
Tax Returns 3.15(a)
Taxes 3.15(a)
Telecommunications Products and
Services 11.05(f)(vi)
Third Party Environmental Matters 10.06(a)
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Total Selected Assets Less Total
Selected Liabilities 1.03(e)(iii)
VEBA Contribution 6.09
In addition, for purposes of this Agreement:
"Affiliate" shall mean, when used with reference to a specified
person or entity, any other person or entity that directly or
indirectly controls or is controlled by, or is under common control
with, the specified person or entity.
"Material Adverse Effect" shall mean any change or effect that has
a material adverse effect when taken together with all other such
changes and effects on the business as a going concern, properties,
assets or financial condition of the Company or the Buyer, as the case
may be, excluding any such change or effect affecting the computer
maintenance and repair services industry generally.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of and on the date first above written.
BUYER:
ATTEST: WANG LABORATORIES, INC.
By: /s/ James J. Hogan
/s/ Albert A. Notini --------------------------
--------------------------
Secretary Title: Senior Vice President
-----------------------
COMPANY:
ATTEST: DATASERV COMPUTER MAINTENANCE,
INC.
By: /s/ M.L. Feidler
/s/ Kelly M. Romich ---------------------------
--------------------------
Assistant Secretary Title: Executive Vice President
------------------------
STOCKHOLDER:
ATTEST: DATASERV, INC.
By: /s/ M.L. Feidler
/s/ Kelly M. Romich ---------------------------
--------------------------
Assistant Secretary Title: Executive Vice President
------------------------
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