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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): September 8, 1999
OneSource Information Services, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-28549 04-3204522
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
300 Baker Avenue 150 CambridgePark Drive
Concord, MA 01742 Cambridge, MA 02140
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(Address of Principal Executive Offices) (Former Address)
Registrant's telephone number, including area code: (978) 318-4300
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Item 5. OTHER EVENTS.
On September 8, 1999, Corporate Technology Information Services,
Inc., a Delaware corporation ("CTI"), the Registrant, and
OneSource Content Corporation, a Delaware corporation and wholly
owned subsidiary of the Registrant ("Subsidiary") entered into an
Agreement and Plan of Merger (the "Merger Agreement") pursuant to
which Subsidiary will merge with and into CTI. A copy of the
Merger Agreement and the related Escrow Agreement are attached
hereto as Exhibits 2.1 and 2.2, respectively and are incorporated
herein by reference. The Merger Agreement provides that CTI will
be the surviving corporation and the parties anticipate that the
merger will occur in October, 1999, subject to the satisfaction of
the conditions set forth in the Merger Agreement.
ITEM 7. EXHIBITS.
2.1 Agreement and Plan of Merger dated September 8, 1999 by and
among the Registrant, Corporate Technology Information
Services, Inc., OneSource Content Corporation and Andrew
Campbell.
2.2 Escrow Agreement dated September 8, 1999 by and among the
Registrant, Corporate Technology Information Services, Inc.,
Andrew Campbell and Citizens Bank of Massachusetts.
99.1 Press release of the Registrant dated September 9, 1999
This Current Report on Form 8-K contains forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned not to place
undue reliance on these forward-looking statements, including
statements about plans and objectives of management and market growth
and opportunity. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
those indicated by such forward-looking statements. Important
cautionary statements and risk factors that would affect actual results
are discussed in Registrant's Registration Statement on Form S-1, as
amended, and its quarterly report on Form 10-Q for the quarter ended
June 30, 1999, each as filed with the Securities and Exchange
Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned authorized officer.
ONESOURCE INFORMATION SERVICES, INC.
September 8, 1999
By: /s/ Roy D. Landon
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Roy D. Landon
Vice President, Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger dated September 8, 1999 by and
among the Registrant, Corporate Technology Information
Services, Inc., OneSource Content Corporation and Andrew
Campbell
2.2 Escrow Agreement dated September 8, 1999 by and among the
Registrant, Corporate Technology Information Services, Inc.,
Andrew Campbell and Citizens Bank of Massachusetts
99.1 Press release of the Registrant dated September 9, 1999
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (herein, together with the Schedules,
Attachments and Exhibits attached hereto, referred to as the "Agreement"), is
made on this 8th day of September, 1999, by and among OneSource Information
Services, Inc., a Delaware corporation ("Parent"), OneSource Content
Corporation, a Delaware corporation ("Acquisition Subsidiary"), Corporate
Technology Information Services, Inc., a Delaware corporation (the "Company"),
and Andrew Campbell (the "Stockholders' Representative"). The Company and
Acquisition Subsidiary are hereinafter collectively referred to as the
"Constituent Corporations."
RECITALS
A. The Boards of Directors of Acquisition Subsidiary, the Company and
Parent have each determined that it is advisable and in the best interests of
their respective stockholders and members, as applicable, to consummate, and
have approved, the business combination transaction provided for herein in which
Acquisition Subsidiary would merge with and into the Company. The Board of
Directors of the Company has directed (or will direct) that the merger be
submitted for approval by its stockholders.
B. Parent, Acquisition Subsidiary and the Company desire to make
certain representations, warranties and agreements in connection with the
transactions contemplated by this Agreement and also to prescribe various
conditions to the consummation of such transactions.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants, representations and warranties hereafter set forth in
this Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. Upon and subject to the terms and conditions of this
Agreement, Acquisition Subsidiary shall merge with and into the Company (the
"Merger") on the Effective Date. From and after the Effective Date, the separate
corporate existence of Acquisition Subsidiary shall cease and the Company shall
continue as the surviving corporation in the Merger (the "Surviving
Corporation").
1.2 CLOSING. The consummation of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Jager, Smith &
Stetler, P.C., One Financial Center, Boston, Massachusetts 02111, at 9:30 a.m.,
local time, on September 8, 1999 or, if all of the conditions to the obligations
of the parties to consummate the transactions contemplated hereby have not been
satisfied or waived by such date, on such mutually agreeable later date as soon
as practicable after the satisfaction
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or waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby (the "Closing Date").
1.3 EFFECTIVE DATE. The "Effective Date" shall be the time at which the
Company and Acquisition Subsidiary file the certificate of merger and other
appropriate documents prepared and executed in accordance with the relevant
provisions of the Delaware General Corporation Law (the "DGCL") with the
Secretary of State of the State of Delaware (the "Certificate of Merger").
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION. On the Effective Date, (a) the certificate of incorporation of the
Company shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided by law and such certificate of
incorporation, and (b) the bylaws of the Company as in effect immediately prior
to the Effective Date shall be the bylaws of the Surviving Corporation until
thereafter amended as provided by law, the certificate of incorporation of the
Surviving Corporation and such bylaws.
1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The officers
and directors of Acquisition Subsidiary shall become the officers and directors
of the Surviving Corporation as of the Effective Date.
1.6 EFFECTS OF THE MERGER. The Merger shall have the effects of a
merger as set forth in the DGCL.
ARTICLE 2
CONVERSION OF SHARES; MERGER PRICE
2.1 CONVERSION OF COMPANY STOCK. On the Effective Date, by virtue of
the Merger and without any action on the part of the holder thereof:
(a) Cash Payment for the Company Stock.
(i) Each issued and outstanding share of the Company
Stock (other than shares to be canceled in accordance with Section 2.1(b) and
other than Dissenting Shares) shall be converted into the right to receive a pro
rata amount of the Merger Price.
(ii) All shares of Company Stock converted in
accordance with paragraph (i) of this Section 2.1(a) shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive a pro rata
amount of the Merger Price, less any required withholding taxes.
(b) Each Company Share held in the Company's treasury
immediately prior to the Effective Date shall be canceled and retired without
payment of any consideration therefor.
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(c) Dissenting Shares.
(i) Notwithstanding any provision of this Agreement
to the contrary, each outstanding share of the Company Stock the holder of which
has not voted in favor of the Merger, has perfected such holder's right to an
appraisal of such holder's shares in accordance with the applicable provisions
of the DGCL and has not effectively withdrawn or lost such right to appraisal (a
"Dissenting Share"), shall not be converted into or represent a right to receive
a pro rata share of the Merger Price pursuant to Section 2.1(a), but the holder
thereof shall be entitled only to such rights as are granted by the applicable
provisions of the DGCL; provided, however, that any Dissenting Share held by a
Person on the Effective Date who shall, after the Effective Date, withdraw the
demand for appraisal or lose the right to appraisal, in either case pursuant to
the DGCL, shall be deemed to be converted into, as of the Effective Date, the
right to receive a pro rata share of the Merger Price pursuant to Section
2.1(a).
(ii) The Company shall give Parent (1) prompt notice
of any written demands for appraisal, withdrawals of demands for appraisal and
any other instruments served pursuant to the applicable provisions of the DGCL
relating to the appraisal process received by the Company and (2) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. Neither the Company nor the Stockholder
Representative will voluntarily make any payment with respect to any demands for
appraisal and will not, except with the prior written consent of Parent, settle
or offer to settle any such demands.
(d) Stock Options.
(i) Vested Options.
(A) A complete and accurate list of all
Persons who hold or will hold vested exercisable options to acquire stock of the
Company as of the Effective Date, which list includes the number of options held
and the exercise price of each option, is set forth on Schedule 2.1(d)(i).
(B) If the holder of a vested exercisable
option to acquire stock of the Company intends to exercise the option on the
Effective Date, such option holder shall deliver to Parent, at or prior to the
Effective Date, an executed copy of the form attached hereto as Exhibit A
("Option Exercise Notice"), which includes both a notice of intent to exercise
the option and acknowledgment that the exclusive benefit of exercising the
option on the Effective Date is the right to receive the difference between the
exercise price and the pro rata share of the Merger Price with respect to the
shares covered by the option, less any required withholding taxes.
(C) If all of the vested exercisable options
set forth on Schedule 2.1(d)(i) are not exercised in full at or prior to the
Effective Date, Parent will
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withhold a sufficient amount of the Cash Consideration to cover cash payments to
be made to the holders of such outstanding options (the "Outstanding Options").
(ii) Unvested Options.
(A) A complete and accurate list of all
Persons who hold unvested options to acquire stock of the Company as of the
Effective Date (the "Unvested Options"), which list includes the number of
options held, the date(s) such options will vest, the periods during which such
options are exercisable and the exercise price of each option, is set forth on
Schedule 2.1(d)(ii).
(B) Parent shall establish a "bonus fund" in
the amount that the holders of Unvested Options would be paid under Section
2.1(d)(i) if such Unvested Options were vested as of the Effective Date. The
holders of Unvested Options shall be paid their pro rata amount of such "bonus
fund" in accordance with the vesting schedule of the option grant.
(e) Closing of Transfer Books. On the Effective Date, the
stock transfer books of the Company shall be closed and no transfer of Company
Stock shall thereafter be made. If, after the Effective Date, certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged for
the pro rata share of the Merger Price in accordance herewith and subject to
applicable law in the case of Dissenting Shares.
2.2 MERGER PRICE; PAYMENT FOR THE COMPANY STOCK.
(a) Merger Price. Schedule 2.2(a)(i) sets forth the aggregate
Merger Consideration, part of which is the amount to be made with respect to
shares of the Company Stock, which shall be $7,606,048 (the "Merger Price"). The
Merger Price shall be net of the bonus fund described in Section 2.1(d)(ii)(B)
above and the liabilities assumed by Parent, as described on Schedule
2.2(a)(ii). The Merger Price shall be allocated among the stockholders of the
Company in proportion to their ownership of the Company as of the Effective
Date, except as otherwise provided for in Section 2.1(d)(i)(B). A complete list
of all stockholders of the Company as of the date hereof, which includes the
number of shares of the Company owned by each listed stockholder, is set forth
on Schedule 2.2(a)(iii).
(b) Payment for the Company Stock. The Merger Price shall be
paid by Parent as follows:
(i) On the Closing Date, Parent shall deposit the
Merger Price with Citizens Bank of Massachusetts (the "Escrow Agent"). On the
Effective Date and assuming the conditions stated in Section 6.2 have been met,
the Escrow Agent shall deliver to the Stockholders' Representative $6,606,048 in
immediately available funds by wire transfer to an account designated by the
Company at least two business days prior to the Effective Date (the "Cash
Consideration"). If there are Dissenting Shares or
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Outstanding Options, then on the Effective Date, the Escrow Agent will withhold
an amount that is reasonable to cover, at Parent's reasonable discretion, the
Dissenting Shares and Outstanding Options. If after resolution satisfactory to
Parent of all issues with regard to Dissenting Shares and Outstanding Options,
the amount withheld proves to be more than required to cover the Dissenting
Shares and Outstanding Options, then the Escrow Agent shall release any
remaining Cash Consideration to the Stockholders' Representative. The
Stockholders' Representative agrees to indemnify, defend and hold harmless
Parent, Acquisition Subsidiary and the Surviving Company from and against all
Damages resulting to, imposed upon or incurred by Parent, Acquisition Subsidiary
or the Surviving Company, directly or indirectly by reason of or resulting from
any claims or liabilities relating to the distribution of the Cash
Consideration.
(ii) On the Effective Date, the Escrow Agent shall
withhold One Million Dollars ($1,000,000.00) (the "Escrow Funds") under the
terms of an escrow agreement (the "Escrow Agreement") to be executed on or prior
to the Closing Date substantially in the form of Exhibit B attached hereto.
Release of the Escrow Funds will be permitted only in accordance with the terms
and conditions of the Escrow Agreement.
2.3 DELIVERABLES OF THE COMPANY.
On the Effective Date, the Company will deliver to counsel to the
Company the following:
(a) each of the certificates and documents contemplated by
ARTICLE 6;
(b) all blank stock certificates, stock books, stock transfer
ledgers, minute books and the corporate seal of the Company;
(c) resignations of the directors and officers of the Company;
(d) resolution of the stockholders of the Company ratifying
the Stockholders' Representative and approving the authority of the
Stockholders' Representative to receive the Cash Consideration on behalf of the
stockholders of the Company;
(e) resolutions of stockholders of the Company approving the
Merger, accompanied by copies of notices sent to stockholders entitled to notice
of such action pursuant to DGCL ss.228(d); and
(f) executed Option Exercise Notices for each and every holder
of a vested exercisable option to acquire stock of the Company who intends to
exercise such option on the Effective Date.
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On the Effective Date, and upon delivery of the Cash Consideration to
the Stockholders' Representative, counsel to the Company shall deliver the above
referenced items to Parent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants, with such representations and
warranties having the nature of guaranties, to Parent and Acquisition Subsidiary
on and as of the date of this Agreement and on and as of the Closing Date
(unless otherwise stated herein below), as follows:
3.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in corporate and tax good
standing under all applicable federal and state laws and regulations. The
Company is duly qualified to conduct business and is in corporate and tax good
standing under the laws of each jurisdiction in which the nature of its business
or the ownership or leasing of its properties requires such qualification,
except where the failure to be so qualified would not have a material adverse
effect on the business, business prospects, assets, results of operations or
financial condition (a "Material Adverse Effect") of the Company. The Company
has all requisite power and authority to carry on the business in which it is
engaged and to own and use the properties owned and used by it. The Company has
furnished to the Parent true and complete copies of its certificate of
incorporation and bylaws, each as amended and as in effect on the date hereof.
The Company is not in default under or in violation of any provision of its
certificate of incorporation or bylaws. The stockholder registers and all
minutes from stockholders' meetings and Board meetings of the Company are in the
possession of the Company and contain a true, accurate and complete record in
all respects of the ownership of the Company and all actions taken by the
stockholders and the Board of the Company, including all matters that should by
law be addressed in such stockholder and Board of Directors registers and
minutes, and any necessary or required filings with the appropriate authorities
arising from such stockholders or Board of Directors action, have been made, and
no notice or allegation that any of such records is incorrect or should be
rectified has been received, and the Company shall have delivered to Parent
true, correct and complete copies of such registers and minutes before the
Closing Date.
3.2 CAPITALIZATION. The authorized capital stock of the Company
consists solely of 3,500,000 shares of common stock, with a par value of $0.01
per share (the "Company Stock"). 2,813,493 shares of the Company Stock have been
legally and validly issued and are fully paid and nonassesable. There are no
additional obligations on the part of any current or future holder of the
Company Stock to make any further contributions with respect to such shares. No
shares of the Company Stock have been issued in violation of preemptive or
similar rights. Except as set forth on Schedule 3.2, there are no stock option
rights or similar rights relating to the Company Stock and no securities giving
a right of conversion into, or any agreement or arrangement that accords to any
Person the right to acquire, shares in the Company. Except as set forth on
Schedule 3.2, the Company
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is under no obligation relating to the issuance of securities or convertible
securities of the Company. There is no proposal to increase the authorized
capital stock of the Company.
3.3 AUTHORIZATION OF TRANSACTION. The officers of the Company have all
requisite power and authority to execute and deliver this Agreement and, on the
Closing Date, to perform their respective obligations hereunder. The execution
and delivery of this Agreement and, the performance by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and the stockholders of
the Company. This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery hereof
by each of Parent and Acquisition Subsidiary and subject to obtaining the
Requisite Stockholder Approval, constitutes a valid and binding obligation of
the Company and each Stockholder, enforceable against each of them in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights generally, or by general equitable principles, and to the extent any
indemnification or contribution provisions thereof may be limited by applicable
federal or state securities laws.
3.4 NO VIOLATION. Subject to the filing of the Certificate of Merger as
required by applicable law and obtaining the Requisite Stockholder Approval,
neither the execution and delivery of this Agreement by the Company, nor the
consummation of the transactions contemplated hereby, will (a) conflict with or
violate any provision of the charter or Bylaws of the Company; (b) require on
the part of the Company any filing with, or any permit, authorization, consent
or approval of, any court, arbitrational tribunal, administrative agency or
commission or other governmental or regulatory authority or agency (a
"Governmental Entity"), other than any filing, permit, authorization, consent or
approval that if not obtained would not have a Material Adverse Effect on the
Company or on the ability of the parties to consummate the transactions
contemplated by this Agreement; (c) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest or other arrangement to which the Company is a
party or by which the Company is bound or to which any of its assets is subject,
other than any filing, permit, authorization, consent or approval that if not
obtained would not have a Material Adverse Effect on the Company or on the
ability of the parties to consummate the transactions contemplated by this
Agreement; (d) result in the imposition of any Security Interest upon any assets
of the Company or (e) violate any order, writ, injunction, decree, statute, law,
rule or regulation applicable to the Company or any of its properties or assets.
3.5 NO BROKERS. Except as provided in Section 5.10, no investment
banker, broker, finder or similar agent has been employed, in connection with
the transaction contemplated by this Agreement, by either (a) the Company, (b) a
stockholder of the Company, acting on behalf of himself or the Company, or (c)
the stockholders of the
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Company or a sub-group of such stockholders, acting on behalf of themselves or
the Company.
3.6 SUBSIDIARIES AND EQUITY INVESTMENTS. The Company has no
subsidiaries and is not a general partnership, participant, member or coventurer
in any joint venture or other business enterprise. The term "subsidiary" means
any corporation of which the Company, directly or indirectly, owns or controls
capital stock representing more than fifty percent of the general voting power
under ordinary circumstances of such corporation.
3.7 FINANCIAL STATEMENTS.
(a) The Company has delivered to Parent certified financial
statements (including balance sheet, statement of operations and deficit, cash
flows and shareholder equity statements) of the Company for the fiscal year
ended on March 31, 1999 (the "Audited Financial Statements"). The Audited
Financial Statements have been prepared in conformity with GAAP applied on a
basis consistent with that of preceding periods and represent actual bona fide
transactions, were prepared from the books and records of the Company, are true,
accurate and complete and fairly present the financial position of the Company
as of the date thereof and the results of operations for the period then ended.
(b) Except as set forth on Schedule 3.7, there are no
liabilities, debts, obligations or claims against the Company of any nature,
absolute or contingent, except (i) as and to the extent reflected or reserved
against on the Audited Financial Statements; (ii) incurred since the Audited
Financial Statements in the Ordinary Course of Business and disclosed to Parent;
or (iii) open purchase or sales orders or agreements for delivery of goods and
services in the Ordinary Course of Business consistent with prior practice.
3.8 ACCOUNTING BOOKS AND RECORDS. The accounting books and records of
the Company are true, accurate and complete, have been maintained in accordance
with applicable Laws and GAAP (beginning with the revised and restated financial
statements for the period ended March 31, 1998) and kept on a consistent basis
and are up-to-date, and properly reflect actual transactions of the Company. The
Company maintains in its possession all relevant documents relating to its
operation.
3.9 ORDINARY COURSE OF BUSINESS. The activities of the Company during
the period from March 31, 1999 to the date hereof have been conducted in
accordance with the ordinary course of business consistent with past practice in
all material respects and there has not occurred or arisen since March 31, 1999
any events or extraordinary business transactions that may have a Material
Adverse Effect upon the Company.
3.10 TAXES.
(a) All necessary Tax and other returns and reports required
to be filed by the Company have been properly filed with the appropriate
authorities and the information reflected in such returns is, in all instances,
true, correct, accurate and
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complete. Schedule 3.10(a) lists all federal, state, local and foreign Tax
returns filed with respect to the Company, indicates those Tax returns that have
been audited, and indicates those Tax returns that are currently the subject of
audit since March 31, 1996. The Company has delivered to the Parent true,
accurate and complete copies of all federal Tax returns, examination reports,
and statements of deficiencies (or asserted deficiencies) assessed against or
agreed to by the Company since March 31, 1996.
(b) The Audited Financial Statements reflect actual payments
or an adequate reserve for all Taxes payable by the Company for all taxable
periods and portions thereof ended on or prior to the date of such financial
statements. All Taxes assessed, incurred or due by the Company in respect of the
period up to and including the date hereof have been fully paid, or an adequate
reserve therefor set up on the books. No additional assessment of Tax in respect
of the period up to and including March 31, 1999 will be made or will be
required to be made in respect of the Company, which will not be included and
reflected in the Audited Financial Statements. There has been no issue raised
(and none is pending) by any Tax authority in connection with any of the returns
or reports referred to in this Section 3.10. The Company has made all deposits
required with respect to such Taxes. The Company has withheld and remitted all
amounts required to be so withheld. True, complete and accurate copies of all
profit and loss transfer agreements, tax sharing agreements, domination
agreements and similar agreements currently in effect with respect to the
Company have been provided to Parent and all such agreements are acceptable to
the relevant Tax authorities. Except as indicated on Schedule 3.10(a), the
Company is not the beneficiary of any extension of time within which to file any
Tax return or pay or remit any Tax due. The Company has not waived any statute
of limitations with respect to any Taxes or agreed to any extension of time with
respect to any Tax assessment or deficiency.
(c) Schedule 3.10(c) sets forth the following information with
respect to the Company as of the year ended March 31, 1999: (A) the basis of the
Company in its assets; (B) the amount of any net operating loss, net capital
loss, unused Tax credits; and (C) other material Tax attributes.
(d) The Company has not filed a consent under Code ss.341(f)
concerning collapsible corporations. The Company has not made any material
payments, is not obligated to make any material payments, nor is it a party to
any agreement that under certain circumstances could obligate it to make any
material payments that will not be deductible under Code ss.280G. The Company
has not been a United States real property holding corporation within the
meaning of Code ss.897(c)(2) during the applicable period specified in
Code ss.897(c)(1)(A)(ii). The Company is not a party to any tax allocation or
sharing agreement. The Company (A) has not been a member of an Affiliated Group
filing a consolidated federal income tax return or (B) has no liability for the
taxes of any other Person under U.S. Federal Regulation ss.1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
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3.11 INSURANCE. All assets of the Company of an insurable nature are
and will be, up to and including the Closing Date, insured against fire and
accident, and the Company carries adequate insurance coverage for all other
risks for which coverage would be prudent considering the business of the
Company, other than insurance covering publishers liability and employment
practices. All assets of the Company of an insurable nature have been insured
for any and all periods with respect to which any loss could be the subject of a
claim made on or after the date of this Agreement. The Company possesses
insurance policies covering global liability, fidelity and personal liability
for the managing directors and the members of the Board of the Company. The
Company has at all times with respect to which there is an unresolved claim
heretofore made or a claim that could be made after the date of this Agreement,
been adequately insured. Such insurance is pursuant to policies that are in full
force and effect, are sufficient to satisfy all requirements of applicable Laws
and any agreements to which the Company is a party, and nothing has occurred or
been omitted to be done nor does any fact or condition exist that would render
any of such policies void or voidable. As of the Closing Date, there is no claim
pending under any insurance policy as to which coverage has been questioned,
denied or disputed by the underwriters of such policy or in respect of which
such underwriters have reserved their rights. All claims that should have been
made against the Company's insurance policies have been made in a timely manner.
3.12 INTELLECTUAL PROPERTY. All Intellectual Property of the Company is
listed on Schedule 3.12. The Company owns all such Intellectual Property or the
Company is licensed to use such Intellectual Property. All Intellectual Property
that is used in, or necessary for, the business of the Company is owned by and
registered to, or licensed to, the Company, with the Company having good and
marketable title to or being validly licensed to use such Intellectual Property,
as appropriate. Such Intellectual Property is not subject to any Encumbrances.
The Company has not been presented any claim, nor are there any proceedings
pending, nor to the best knowledge of the Company, contemplated or threatened
against the Company asserting that the use by the Company of any such
Intellectual Property infringes on the rights of any other Person or seeking
revocation, termination, or concurrent use of any such Intellectual Property,
and there is, to the best knowledge of the Company, no basis for any such claim
or proceeding. To the best knowledge of the Company, none of such Intellectual
Property is being infringed upon by any other Person. To the extent that a
stockholder of the Company has had any ownership interest in the Intellectual
Property listed on Schedule 3.12, such stockholder has assigned or will assign
on or prior to the Closing Date, all rights to such Intellectual Property to the
Company.
3.13 LABOR MATTERS. No individual under an employment agreement, a
collective bargaining agreement, a consulting agreement and/or a free-lance
agreement or any combination thereof ("Labor Agreements") with the Company or
any of the stockholders of the Company provides key services to the Company. All
of the Company's Labor Agreements comply with all applicable Tax, labor and
employment Laws. Since March 31, 1999, the Company has not entered into or
modified a Labor Agreement except as consistent with past practice. Any increase
to a Company Labor
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Agreement granted, awarded or authorized during fiscal year ending March 31,
1999 has been consistent with past practices, reasonable and in the ordinary
course of business.
3.14 BENEFIT PLANS. Other than as set forth on Schedule 3.14 the
Company does not have any obligation (whether current or contingent) to
contribute to, or have any liability with respect to, any plan, agreement or
arrangement that is a deferred compensation agreement, or an incentive bonus or
other bonus, employee pension, profit-sharing, savings, retirement, stock
option, stock purchase, severance pay, life, health, disability or accident
insurance plan, or vacation or other employee benefit plan.
3.15 LABOR CLAIMS AND DISPUTES. There are no labor claims filed, nor
are there any reasons to believe that such claims may arise in the future, and
there are no pending disputes, between the Company and any employee, works
council or trade union, whether local or national.
3.16 CHANGE EVENTS. Except as specifically contemplated hereby, the
consummation of the transactions contemplated by this Agreement will not, for
any employee, Director, Agent or consultant of the Company, entitle them to
severance pay, unemployment compensation or any other payment, acceleration,
vesting, or increase in compensation or benefits, or to terminate or shorten
their employment or assignment, and to the best knowledge of the Company, none
will give notice terminating his employment or assignment as a consequence of
the transactions contemplated by this Agreement.
3.17 RECENT TERMINATIONS. There are no agreements, contracts or
otherwise providing for severance payments or other obligations for which the
Company is liable to any employee, Director, Agent or consultant of the Company
by way of damages or compensation for loss of office or employment or for
redundancy or unfair or wrongful dismissal, in excess of any statutory limit for
such liabilities or otherwise. No former employee of the Company has a right to
reemployment or other similar right.
3.18 LABOR STRIKES. There is no labor strike, dispute, slowdown or work
stoppage pending or threatened against the Company and none of such events nor
any other labor difficulty has been experienced during the two year period prior
to the date hereof.
3.19 COMPLIANCE WITH LAWS. The Company has conducted and does conduct
its business and activities in compliance with all Laws relating to its
employment practices, business and properties. No injunctions, notices,
citations, complaints, cautions or remarks by any Governmental Entity have been
directed towards the Company, nor has the Company received any notice or claim
that the business of the Company is not now or previously has not been so
conducted; and there are no outstanding orders, decrees or judgments in respect
of the Company.
3.20 PERMITS AND LICENSES. The Company has obtained all Permits and
Licenses necessary under all applicable Laws for its business, and all such
Permits and
<PAGE> 12
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Licenses are in full force and effect, except where the failure to have obtained
a Permit or License will not have a Material Adverse Effect upon the Company,
and the Company is the authorized holder of each such Permit or License. The
Company is in compliance with all its obligations with respect thereto, and no
event has occurred that permits or, with or without the giving of notice or
passage of time, would permit the revocation or termination of any such Permits
or Licenses, and no notice has been issued and no proceeding is pending or
threatened with respect to any alleged failure by the Company to have or comply
with any Permit or License.
3.21 LITIGATION AND INVESTIGATIONS. The Company is not involved in nor
does it reasonably foresee being involved in any claims, legal proceedings,
arbitration proceedings, Tax proceedings, administrative proceedings or
investigations involving a value higher than $10,000 per case or $37,500 in the
aggregate, with the exception of collection of receivables in the ordinary
course of business all of which have in the aggregate been fully reserved in the
books and records of the Company. To the best knowledge of the Company, no
investigation or inquiry is being or has been conducted since and including
March 31, 1996 by any Governmental Entity or other body in respect of the
affairs of the Company, and no such investigation is pending, threatened or
expected.
3.22 ASSETS. Except as set forth in Schedule 3.22, the Company has good
and marketable title to all properties (real, personal, tangible and intangible,
including Intellectual Property) it owns or purports to own, free and clear of
any Encumbrance. The Company owns or leases all assets necessary for it to carry
on its business as currently conducted, and such assets are in good operating
condition, ordinary wear and tear excepted, fully maintained and serviced as
necessary. The Company does not have any contractual obligation to purchase or
sell any real property.
3.23 COMMERCIAL TERMS. The Company is not a party to any transaction or
arrangement that is not of an arm's length nature or not made in connection with
its business.
3.24 RELATED PARTY TRANSACTIONS. Except for employment compensation and
reimbursement for business expenses incurred in the ordinary course of business
owed by the Company to a stockholder of the Company, an Affiliate of a
stockholder of the Company, an employee, or Director ("Related Party"), no
Related Party has any claim of any kind against the Company, and there exist (a)
no agreements or arrangements between the Company and such Related Party, (b) no
liabilities and obligations (contingent or otherwise) owed by the Company in
respect of such Related Party, (c) no guarantees or similar commitments issued
by the Company for obligations owed by such Related Party, and (d) no services
that have heretofore been provided to the Company by any Related Party that are
necessary for the conduct of the Company's business in the ordinary course.
3.25 PREMISES. To the extent the Company owns any premises, it has
valid and marketable title to such owned premises ("Owned Premises"), free of
any Encumbrances,
<PAGE> 13
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and any leased premises are being leased by the Company under valid and
enforceable leases ("Leased Premises"), and there exists no default, or any
circumstance by which the giving of notice or upon the passage of time would
become a default, by any party (including the Company) under any lease
agreement. Title to each of the Company's Owned Premises has been duly recorded
and registered in the real property registry. Each of the Company's Leased
Premises has been duly recorded and registered in the real property registry.
3.26 RECEIVABLES. All receivables of the Company as reflected on
Audited Financial Statements were, as of the date thereof, and all such
receivables currently held by the Company are, collectible in full at their
recorded amounts, reflecting the fair market value of such receivable, in the
ordinary course of business without resort to litigation, net of all discounts
and doubtful accounts as reflected on the Audited Financial Statements (in case
of receivables so reflected) or on the books of the Company (in the case of
current receivables).
3.27 INVENTORY. Except as set forth in Schedule 3.27, the inventories
of raw materials, in-process and finished products of the Company are in good
condition, conform in all respects with the Company's applicable specifications
and warranties, are not obsolete, are useable or saleable in the ordinary course
of business and, if saleable, are saleable at values not less than the book
value amounts thereof; all in-process and finished products in such inventories
have been produced in compliance with the Company's applicable quality control
procedures. The value of all items of obsolete materials and of materials of
below standard quality has been written down to net realizable value or adequate
reserves have been provided therefor. The values at which such inventories are
carried are in accordance with GAAP consistently applied. The amount and mix of
items in the inventories of supplies, in-process and finished products is, and
will be at the Closing Date, consistent with the Company's past business
practices, except as detailed in Schedule 3.27.
3.28 LIABILITIES. There are no liabilities of the Company of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there are no existing conditions, situations or set of
circumstances that could reasonably be expected to result in such a liability,
other than: (a) liabilities provided for in the Audited Financial Statements or
disclosed in the notes thereto and not discharged since the date thereof; (b)
liabilities incurred since such statements in the ordinary course of business
consistent with past practice and disclosed to Parent; and (c) liabilities
listed on Schedule 3.7 (collectively, "Permitted Liabilities").
3.29 PRODUCT LIABILITY; PRODUCT WARRANTY. There are no claims, actions,
suits, inquiries or proceedings by or before any Governmental Entity asserted,
pending or, to the best knowledge of the Company, threatened against, or to the
best knowledge of the Company any investigations, involving the Company that (a)
relate to the ownership, possession or use of any product or use of any product
alleged to have been manufactured, assembled, configured, distributed or sold by
the Company and alleged to have been
<PAGE> 14
14
defective or improperly designed or manufactured, or based upon any products'
failure to be Year 2000 compliant (b) state a claim under any warranty,
guarantee or indemnification made by the Company (c) arise from or are alleged
to arise from actual or alleged injury to persons or property as a result of the
conduct of the Company, or (d) arise from or are based upon the infringement of
any copyright, patent, trademark or trade secret. To the best knowledge of the
Company, there are no recalls pending or threatened with respect to any products
manufactured, assembled, configured, distributed or sold by the Company under
any applicable Law with respect to any product defects or hazards in connection
with any such products and there have been, to the best knowledge of the
Company, no material recurring defects therein that create such a defect or
hazard.
3.30 ENVIRONMENTAL MATTERS. There are no liabilities of or relating to
the business of the Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, arising under or relating to
any Environmental Law, and there are no facts, conditions, situations or set of
circumstances that could reasonably be expected to result in or be the basis for
any such liability. No notice, notification, demand, request for information,
citation, summons, order or complaint has been received, no penalty has been
assessed and no action, suit or proceeding is pending, or to the best knowledge
of the Company, threatened (nor to the best knowledge of the Company is there
any investigation or review pending) by any Governmental Entity or other Person
with respect to any matters relating to the Company arising out of any
Environmental Law. No polychlorinated biphenyls, radioactive material, lead,
asbestos-containing material, incinerator, landfill, septic, wastewater
treatment or other disposal system or underground storage tank (active or
inactive) is or has been present at, on or under any property now or previously
owned, leased or operated by the Company. No Hazardous Substance has been
discharged, disposed of, deposited, spilled, leaked or released at, on or under
any property now or previously owned, leased or operated by the Company. There
has been no environmental investigation, study, audit, test, review or other
analysis conducted that the Company has in its possession in relation to the
current or prior business of the Company or any property or facility now or
previously owned, leased or operated by the Company that has not been made
available to Parent at least 10 days prior to the date hereof.
3.31 MATERIAL AGREEMENTS AND LICENSES. Set forth on Schedule 3.31 is a
true, accurate and complete list of all contracts, agreements, licenses and
other instruments of the Company. Each of the contracts, agreements, Licenses
and other instruments of the Company, including but not limited to all of the
agreements and Licenses listed on Schedule 3.31 (a) were entered into in the
ordinary course of business; (b) constitute a valid and binding agreement of the
parties thereto, enforceable in accordance with their respective terms; (c) have
not been materially breached by the Company; (d) do not restrict or confine the
Company's ability to conduct its business in an ordinary manner; (e) contain
enforceable obligations of the Company that have been properly entered into the
books of the Company and are reflected on the Audited Financial Statements or
the notes thereto, in accordance with GAAP; (f) do not contain any provision
whereby the Company is liable for the obligations of another Person, such as
(for example, but without limitation) by way
<PAGE> 15
15
of a guarantee or partnership agreement; and (g) do not include any form of
governmental state aid, including but not limited to loans or Tax subsidies,
that the Company may be required to repay at any time. The Company has not given
any power of attorney or other authority that is still outstanding to enter into
any such material agreement or material obligation on its behalf.
3.32 SUPPLIERS. None of the five largest suppliers and licensors of the
Company by sales volume (set forth on Schedule 3.32(i) hereof) for the fiscal
year ended March 31, 1999 has recently terminated its contract with the Company.
No such pending termination exists at this time. Schedule 3.32(ii) lists all of
the Company's accounts payable as of a date no more than seven (7) days prior
the Closing Date.
3.33 DIVIDENDS. The Company has not declared or paid dividends or other
distributions since March 31, 1999 and no warrants nor dividends will be
outstanding as of, or paid on or prior to, the Closing Date.
3.34 INFORMATION. To the best of the Company's knowledge, all copies
and other relevant documentation relating to agreements entered into by the
Company, and other information that is material in relation to the activities of
the Company, including historical records, are true, accurate and complete in
all material respects, have been identified and made available to Parent by
Company, and are in the direct or indirect possession of the Company.
3.35 NO MISSTATEMENTS. No representation or warranty made in this
Agreement by the Company contains or will contain, at the time of delivery, any
untrue statement of a material fact or omits or will omit, at the time of
delivery, to state a material fact necessary to make the statements contained
herein not misleading. The Company is not aware of any facts that it reasonably
believes might result in a Material Adverse Effect upon the Company that have
not been clearly set forth in this Agreement (including the Schedules and
Exhibits hereto).
3.36 CORRUPT PRACTICES. Neither the Company, nor any employee or Agent
of the Company acting on behalf of the Company, has offered, paid or agreed to
pay, directly or indirectly, any consideration of any nature whatsoever to any
official, agent or employee of any government, or to any candidate for political
office in any country to influence any act, decision or omission of any such
official agent, employee, political party, political party official or candidate
in his or its official capacity that would render the Company in violation of or
subject to liability under any law, rule or regulation applicable to Parent,
including but not limited to the Foreign Corrupt Practices Act of the United
States of America.
3.37 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the documents to be delivered
in connection herewith require no approval or other action by or in respect of,
or filing with, any Governmental Entity.
<PAGE> 16
16
3.38 PARENT'S DUE DILIGENCE. Any review of the records and other
documents of the Company or other due diligence performed by Parent or its
stockholders, auditors or other representatives, prior to the Closing Date,
shall not affect the obligations or liabilities under this Agreement.
3.39 YEAR 2000 COMPLIANCE. The Status of the Company's year 2000
preparedness is set forth on Schedule 3.39 of this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE
ACQUISITION SUBSIDIARY
Each of Parent and Acquisition Subsidiary jointly and severally
represent and warrant to the Company, as of the date of this Agreement and as of
the Closing, as follows:
4.1 ORGANIZATION. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware.
Acquisition Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Parent and
Acquisition Subsidiary is duly qualified to conduct business and is in good
standing under the laws of each jurisdiction in which the nature of its business
or the ownership or leasing of its properties requires such qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect on Parent or Acquisition Subsidiary. Each of Parent and Acquisition
Subsidiary has all requisite power and authority to carry on the business in
which it is engaged and to own and use the properties owned and used by it.
Parent has furnished to the Company true and complete copies of Acquisition
Subsidiary's Certificate of Incorporation and bylaws. To the best of its
knowledge, Acquisition Subsidiary is not in default under or in violation of any
provision of its Certificate of Incorporation or bylaws. To the best of its
knowledge, Parent is not in default under or in violation of its Certificate of
Incorporation or bylaws.
4.2 AUTHORIZATION OF TRANSACTION. Each of Parent and Acquisition
Subsidiary has all requisite power and authority to execute and deliver this
Agreement and (in the case of Parent) the Escrow Agreement and to perform their
respective obligations hereunder and thereunder. The execution and delivery of
this Agreement and (in the case of Parent) the Escrow Agreement by Parent and
Acquisition Subsidiary, the performance of this Agreement and (in the case of
Parent) the Escrow Agreement and the consummation of the transaction
contemplated hereby and thereby by Parent and Acquisition Subsidiary has been
duly and validly authorized by all necessary corporate action on the part of
Parent and Acquisition Subsidiary, and their respective stockholders and members
as may be required by law. This Agreement has been duly and validly executed and
delivered by Parent and Acquisition Subsidiary and constitutes a valid and
binding obligation of each of them, enforceable against them in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditor's rights generally,
or by general equitable principles, and to the extent any
<PAGE> 17
17
indemnification or contribution provision thereof may be limited by applicable
federal or state securities laws.
4.3 NO CONTRAVENTION. The execution, delivery and performance of this
Agreement and the other documents to be executed in connection herewith, the
consummation of the transactions contemplated hereby and thereby in accordance
with the terms and conditions hereof and thereof and the compliance with the
provisions hereof and thereof by Parent and Acquisition Subsidiary do not and
will not, after the giving of notice, or the lapse of time, or otherwise: (a)
result in the breach of, conflict with, or constitute a default under, the
provisions of any agreement or other instrument to which Parent or Acquisition
Subsidiary is a party or by which the property of Parent is bound or affected or
(b) violate or conflict with any laws, regulations, order, writs, decrees,
injunctions or judgments applicable to Parent or Acquisition Subsidiary.
4.4 LITIGATION. As of May 19, 1999, as set forth in the Parent's
Prospectus filed with the SEC pursuant to Rule 424 and as incorporated by
reference in the Parent's 10-Q Quarterly Report filed with the SEC as of August
13, 1999, OneSource is not a party to any material legal proceedings.
4.5 NO MISLEADING STATEMENTS. No representation or warranty made in
this Agreement by Parent or Acquisition Subsidiary contains or will contain, at
the time of delivery, any untrue statement of a material fact or omits or will
omit, at the time of delivery, to state a material fact necessary to make the
statements contained herein not misleading. Parent and Acquisition Subsidiary
are not aware of any facts that they reasonably believe might result in a
Material Adverse Effect that have not been clearly set forth in this Agreement
(including the Schedules hereto).
4.6 FINANCIAL CAPACITY. Parent has the financial capacity to satisfy
all of Parent's obligations under this Agreement and the documents to be
executed and exchanged at the Closing, and to perform all of Parent's
obligations at the Closing.
4.7 INVESTMENT. Parent (a) is a sophisticated investor with knowledge
and experience in business and financial matters, (b) has received certain
information concerning the Company and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in the transactions contemplated by this Agreement, and (c) is an
Accredited Investor.
ARTICLE 5
COVENANTS OF THE PARTIES
5.1 ACTIONS PENDING THE EFFECTIVE DATE. Except to the extent consented
to in writing by Parent, until the Effective Date, the Company will conduct its
business, operations, activities and practices only in the ordinary course of
business, consistent with past practice. In addition to the foregoing, from the
date hereof to the Effective Date, (a) the Company shall not declare or pay any
dividend or distribution; (b) the Company shall
<PAGE> 18
18
not change its certificate of incorporation or bylaws; (c) the Company shall not
enter into any financing agreement; or (d) enter into any agreement whereby any
asset of the Company shall become subject to a Security Interest therein.
5.2 STOCKHOLDER CONSENT. The Company shall obtain the Requisite
Stockholder Approval on or prior to the Effective Date. In connection with the
Requisite Stockholder Approval, the Company acting through its Board of
Directors, shall recommend that the stockholders of the Company consent to the
adoption of this Agreement and the approval of the Merger.
5.3 TERMINATION EVENTS. If after the date hereof and prior to the
Effective Date, any of the following conditions shall be present or events shall
occur:
(a) the Company suffers casualty losses that are material to
the conduct of the business of the Company as a whole (whether or not such
losses are insured); or
(b) evidence is obtained that the Company, or any officer or
Director of the Company, or any employee or agent of the Company while
performing his or her duties for the Company, has been involved in criminal
activity or there exists any circumstances giving rise to potential civil
liabilities of the Company, including but not limited to any liabilities arising
with respect to Tax or customs matters; or
(c) the Company breaches Section 5.1 herein; or
(d) the Company fails to gain Stockholder Consent as set forth
in Section 5.2 herein; or
(e) the Company shall have failed to perform any applicable
obligation set forth in Section 6.2 below;
then Parent shall have the right to terminate this Agreement and receive a full
refund of any consideration paid hereunder.
5.4 DUE DILIGENCE. On the Closing Date, the Company shall grant Parent
access to the books, records, offices and employees of the Company for the
purpose of continuing its due diligence review of the Company. Any review of the
records and other documents of the Company or other due diligence performed by
Parent or its auditors or representatives shall not affect either the Company's
obligations or liabilities under this Agreement.
5.5 CONSENTS. The Company shall obtain prior to the Effective Date all
consents necessary or advisable, in the reasonable opinion of Parent and its
counsel, including, but not limited, to those specified in Schedule 5.5, in
connection with the consummation of the transactions contemplated hereby,
provided that such items are requested a reasonable time prior to the Effective
Date. All such consents shall be in writing and in form and substance
satisfactory to Parent and Parent's counsel and executed
<PAGE> 19
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counterparts thereof shall be delivered to Parent promptly after receipt thereof
by the Company but in no event later than the Effective Date. Parent agrees to
reasonably assist and cooperate with the Company in obtaining such consents.
5.6 NO SOLICITATION.
(a) Between the date of this Agreement and the Effective Date,
the Company shall not, nor shall any Affiliate of the Company or any of its
Directors, stockholders or other representatives, (i) directly or indirectly,
encourage, solicit, initiate or participate in discussions or negotiations with,
or provide any information or assistance to, any corporation, partnership,
Person, or other entity or group (other than Parent and Acquisition Subsidiary
and their representatives) concerning any merger, sale of securities, sale of
substantial assets, investment proposals or similar transaction involving the
Company, (ii) entertain or discuss any acquisition or investment proposal
arising either from any party who previously expressed an interest in the
Company or from any unsolicited sources, or (iii) withdraw the Company's
intention to consummate the transactions contemplated by this Agreement.
(b) Further, the Company covenants that in the event it or any
Affiliate of the Company have had discussions with any third party with respect
to the sale of the Company, the Company will utilize best efforts to retrieve
any Confidential Information regarding the Company that was delivered to such
third party and shall assign to Parent all rights under any confidentiality
agreements entered into between the Stockholders, an Affiliate or the Company
and such third party.
(c) Between the date of this Agreement and the Effective Date,
the Company shall not, nor shall any Affiliate, agent or representative of the
Company disclose to any third party or use, except for use in the ordinary
course of business for the benefit of the Company, any Confidential Information
concerning the Company, its business or financial condition.
5.7 SUPPLEMENTAL DISCLOSURE. Until the Closing Date, the Company shall
have the continuing obligation to supplement or amend promptly any Schedule with
respect to any matter hereafter arising or discovered that, if existing or known
at the date of this Agreement, would have been required to be set forth or
described in such Schedule; provided, however, that for the purpose of the
rights and obligations of the parties hereunder, any such supplemental or
amended disclosure shall not be deemed to have been disclosed as of the date of
this Agreement unless so agreed to in writing by Parent.
5.8 ANNOUNCEMENT. Upon the signing of this Agreement, an announcement
with respect to the transactions contemplated hereunder may be made in the form
of a joint announcement to be mutually agreed upon by the parties.
5.9 CONSULTING AGREEMENT BETWEEN THE COMPANY AND ANDREW CAMPBELL. At or
prior to the Closing Date, Andrew Campbell shall have entered into a consulting
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agreement (the "Consulting Agreement") with the Company substantially in the
form of Exhibit C attached hereto.
5.10 PAYMENT OF BERKERY, NOYES & CO. Parent acknowledges that the
Company engaged Berkery, Noyes & Co. in connection with the transactions
contemplated by this Agreement. The Stockholders' Representative will pay, from
the Cash Consideration, Three Hundred Seventy Thousand Dollars ($370,000.00) to
Berkery, Noyes & Co., which is the amount of the fees that the Company owes in
connection with the transactions contemplated by this Agreement.
5.11 PAYMENT OF LEGAL FEES. In accordance with Section 9.9, the
Stockholders' Representative will pay, from the Cash Consideration, the legal
fees incurred by the Company through the Effective Date.
5.12 FURTHER ASSURANCES. Each party hereto will, either prior to or
after the Effective Date, execute such further documents, instruments, deeds,
bills of sale, assignments and assurances and take such further actions as may
reasonably be requested by one or more of the other parties hereto to consummate
the Merger, to vest the Surviving Corporation with full title to all assets,
properties, rights, approvals, immunities and franchises of either of the
Constituent Corporations or to effect the other purposes of this Agreement.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF MERGER
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective obligations
of each party to consummate the Merger are subject to the satisfaction of the
following conditions:
(a) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(b) no action, suit or proceeding shall be pending or
threatened by or before any Governmental Entity wherein an unfavorable judgment,
order, decree, stipulation or injunction would (i) prevent consummation of any
of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation or (iii) affect adversely the right of Parent to own, operate or
control any of the assets and operations of the Surviving Corporation following
the Merger, and no such judgment, order, decree, stipulation or injunction shall
be in effect; and
(c) the execution by Parent, the Stockholders and the Escrow
Agent of the Escrow Agreement; provided, however, that no party who refuses to
sign such agreement may utilize this subsection if the terms of the Escrow
Agreement are
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21
substantially as set forth in Exhibit B attached hereto. The parties agree that
consent to this Section 6.1(c) shall be deemed as consent to the Escrow
Agreement.
6.2 CONDITIONS TO OBLIGATIONS OF PARENT AND ACQUISITION SUBSIDIARY. The
obligation of each of Parent and Acquisition Subsidiary to consummate the Merger
is subject to the satisfaction or waiver by such party of the following
conditions:
(a) There shall be no Dissenting Shares in excess of five
percent (5%) of the outstanding shares of Company Stock as of the Effective
Date;
(b) The representations and warranties of the Company
contained in this Agreement or in any certificate or document delivered to the
Parent pursuant hereto shall be complete, true and accurate on the date when
made and shall also be accurate in all such respects on the Effective Date to
the same extent as if made on such date, except for any changes expressly
permitted by the terms of this Agreement. The Company shall have performed and
complied in all material respects with all covenants, obligations and agreements
required by this Agreement to be so performed or complied with by it at or prior
to the Effective Date. Between the date of this Agreement and the Effective
Date, no event shall have occurred that is reasonably likely to result in a
Material Adverse Effect upon the Company;
(c) The Company shall have delivered to Parent and Acquisition
Subsidiary a certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified in clauses
6.1(a) and 6.1(b) and clauses (a) and (b) of this Section 6.2 have been
satisfied in all respects;
(d) Parent and Acquisition Subsidiary shall have received from
counsel to the Company an opinion with respect to the matters and in a form as
substantially set forth in Exhibit D attached hereto, addressed to the Parent
and the Acquisition Subsidiary and dated as of the Closing Date;
(e) The Company shall have no material liabilities, except as
set forth in Section 3.28 of this Agreement;
(f) All material actions to be taken by the Company in
connection with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to the Parent and the Acquisition Subsidiary;
(g) The Ancillary Documents and all other documents to be
delivered by the Company to Parent at the Closing shall be in form and substance
satisfactory to Parent;
(h) Parent shall have received copies of such other documents,
agreements, assignments, consents, certificates, approvals, opinions, surveys,
waivers and
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22
amendments as Parent and its counsel may reasonably require, provided that such
items are requested a reasonable time prior to the Effective Date; and
(i) Andrew Campbell having entered into the Consulting
Agreement described in Section 5.9 herein.
6.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of the
Company to consummate the Merger is subject to the satisfaction of the following
additional conditions:
(a) the representations and warranties of Parent and
Acquisition Subsidiary set forth in ARTICLE 4 shall be true and correct when
made on the date hereof and shall be true and correct as of the Effective Date
as if made as of the Effective Date, except for representations and warranties
expressly made only as of a specific date, which shall be true and correct as of
such date; and
(b) each of the Parent and Acquisition Subsidiary shall have
performed or complied with its agreement and covenants required to be performed
or complied with under this Agreement as of or prior to the Effective Date; and
(c) Andrew Campbell shall have been released from all personal
guaranties given by him for the benefit of the Company, or, in the alternative,
the Parent hereby fully indemnifies Andrew Campbell for all costs and expenses
incurred by him subsequent to the Closing Date in connection with said
guaranties. Such guaranties shall be listed on Schedule 6.3.
ARTICLE 7
INDEMNIFICATION
7.1 ACCURACY AND TIMING OF REPRESENTATIONS. All representations,
warranties, covenants and agreements made by the Company, Parent and Acquisition
Subsidiary herein or pursuant hereto shall be true, complete and correct as of
the date hereof and at and as of the Closing Date as though such
representations, warranties, covenants and agreements were made at and as of the
Closing Date.
7.2 INDEMNIFICATION OF PARENT, ACQUISITION SUBSIDIARY AND THE COMPANY.
Subject to the terms and conditions of this ARTICLE 7, the Company, on behalf of
its stockholders and acting through the Stockholders' Representative shall
indemnify, defend and hold harmless Parent, Acquisition Subsidiary and the
Company (i.e., the Surviving Corporation), solely from funds held by the Escrow
Agent on behalf of such stockholders, from and against all Damages resulting to,
imposed upon or incurred by Parent, Acquisition Subsidiary or the Company,
directly or indirectly, up to the amount of One Million Dollars ($1,000,000.00)
for a period of one (1) year beginning on the Effective Date and, limited by the
amount of Escrow Funds for which valid claims have not yet been made, up to
Seven Hundred Fifty Thousand Dollars ($750,000.00) for a period of six (6)
<PAGE> 23
23
months beginning twelve (12) months following the Effective Date and up to Five
Hundred Thousand Dollars ($500,000.00) for a period of six (6) months beginning
eighteen (18) months following the Effective Date (except as limited below), by
reason of or resulting from: (a) liabilities, obligations or claims of or
against the Parent, Acquisition Subsidiary, Stockholders' Representative or the
Company (whether absolute, accrued, contingent or otherwise) relating in any way
to the common stock, business, assets, or liabilities of the Company or any
current or former employees of the Company (i.e., employees of the Company on or
prior to the Effective Date), which liabilities, obligations or claims existed
as of the Effective Date or arose out of facts, circumstances or conditions that
existed at or prior to the Effective Date, regardless of whether such
liabilities, obligations or claims were known at or prior to the Effective Date,
but excluding liabilities, obligations or claims resulting from direct actions
or failures to act on the part of employees or Agents of Parent, liabilities,
obligations or claims shown on the Audited Financial Statements or otherwise
disclosed on schedules to this Agreement, and Permitted Liabilities; (b)
investigations or proceedings by any Governmental Entity concerning any of the
foregoing facts, circumstances or conditions; (c) a breach of any obligation,
representation, warranty, covenant or agreement of either the Company,
Acquisition Subsidiary, Stockholder Representative or any of the stockholders of
the Company contained in or made pursuant to this Agreement or any ancillary
agreement (including the Confidentiality and Non-Disclosure as agreed to on June
21, 1999); (d) any real or personal property transfer or gains Taxes and all
other Taxes or filing, recording or similar fees and charges that, pursuant to
this Agreement, were to be borne by the stockholders of the Company, that may be
due as a result of the transactions contemplated by this Agreement; (e) any
claims or liability for brokerage commissions or finder's fees incurred by
reason of any action taken by stockholders of the Company or Agents of the
Company prior to the Effective Date; (f) reasonable costs and expenses incurred
in settlement of, or related to, Dissenting Shareholders appraisal rights; and
(g) claims or liabilities related to Stockholders' Representative's fulfillment
of his obligations hereunder (collectively, the "Parent Claims"). Furthermore,
Parent shall not seek indemnification for any Parent Claim unless the value of
all Parent Claims is not less than $37,500.00.
7.3 INDEMNIFICATION OF THE STOCKHOLDERS. Subject to the terms and
conditions of this ARTICLE 7, Parent agrees to indemnify, defend and hold
harmless, for the period of two (2) years beginning on the Effective Date, the
stockholders of the Company and the Stockholders' Representative, from and
against all Damages resulting to, imposed upon or incurred by the stockholders
of the Company, directly or indirectly up to an amount of One Million Dollars
($1,000,000.00), by reason of or resulting from: (a) liabilities, obligations or
claims of or against the stockholders of the Company (whether absolute, accrued,
contingent or otherwise) relating in any way to the common stock, business,
assets or liabilities of the Company or the employees of the Company (i.e.,
employees of the Company after the Effective Date), which liabilities,
obligations or claims arose out of facts, circumstances or conditions occurring
as a result of the actions contemplated by this Agreement or that take place
after the Effective Date, but excluding liabilities, obligations or claims
resulting from direct actions or failures to act on the part of employees or
Agents of the stockholders of the Company or any of them; (b) investigations or
proceedings by
<PAGE> 24
24
any Governmental Entity concerning any of the foregoing facts, circumstances or
conditions; (c) a breach of any representation, warranty, covenant or agreement
of Parent contained in or made pursuant to this Agreement or any ancillary
agreement; (d) any real or personal property transfer or gains Taxes and all
other Taxes or filing, recording or similar fees and charges that, pursuant to
this Agreement, were to be borne by Parent, that may be due as a result of the
transactions contemplated by this Agreement; and (e) any claim or liability for
brokerage commissions or finder's fees incurred by reason of any action taken by
Parent (collectively, the "Stockholders' Claims"). Furthermore, the stockholders
of the company shall not seek indemnification for any Stockholders' Claim unless
the value of all Stockholders' Claims is not less than $37,500.00.
7.4 PROCEDURES FOR RESOLUTION AND PAYMENT OF CLAIMS FOR
INDEMNIFICATION.
(a) If a Person or entity entitled to be indemnified under
this Agreement (the "Indemnitee") shall incur any Damages or determine that it
is likely to incur any Damages, including without limitation claims by third
parties described in Section 7.4(c) hereof, and believes that it is, or will be
entitled to be indemnified against such Damages by a party hereunder (the
"Indemnitor"), such Indemnitee shall promptly deliver to the Indemnitor (either
Parent or the Stockholders' Representative) and Escrow Agent, if applicable, a
certificate (an "Indemnitee's Certificate") signed by the Indemnitee, which
Indemnitee's Certificate shall:
(i) state that the Indemnitee has paid or properly
accrued Damages, or anticipates that it will incur liability for Damages for
which such Indemnitee is entitled to indemnification pursuant to this Agreement;
and
(ii) specify in reasonable detail each individual
item of Damages included in the amount so stated, the date such item was paid or
properly accrued, the basis for any anticipated liability and basis upon which
the claim for indemnification is being made and the computation of the amount to
which such Indemnitee claims to be entitled hereunder.
(b) The Indemnitor shall have fifteen (15) calendar days from
the date of receipt of the Indemnitee's Certificate to agree upon the rights of
the Indemnitee and the Indemnitor or to object, in whole or in part, to the
claims for indemnification set forth in the Indemnitee's Certificate. In case
the Indemnitor shall object to the indemnification of an Indemnitee in respect
of any claim or claims specified in any Indemnitee's Certificate, the Indemnitor
shall deliver to the Indemnitee a written notice to such effect and the
Indemnitor and the Indemnitee shall, within the 30-day period beginning on the
date of receipt by the Indemnitee of such written objection, attempt in good
faith to agree upon the rights of the Indemnitee and the Indemnitor regarding
each of such claims to which the Indemnitor shall have so objected. If the
Indemnitee and the Indemnitor shall succeed in reaching agreement on their
respective rights with respect to any of such claims, the Indemnitee and the
Indemnitor shall promptly prepare and sign a memorandum setting forth such
agreement. If the Indemnitor shall succeed in defending the claim specified in
<PAGE> 25
25
any Indemnitee's Certificate, then the Indemnitee shall reimburse the Indemnitor
for all reasonable expenses and costs, including reasonable attorneys' fees, of
such defense or a proportional amount thereof in the case of settlement for
partial indemnification.
(c) Promptly after the assertion by any third party of any
claim against any Indemnitee that, in the judgment of such Indemnitee, may
result in such Indemnitee incurring Damages for which such Indemnitee would be
entitled to indemnification pursuant to this Agreement, such Indemnitee shall
deliver to the Indemnitor a written notice describing in reasonable detail such
claim and such Indemnitor may, at its option, assume the defense of the
Indemnitee against such claim (including the employment of counsel, who shall be
reasonably satisfactory to such Indemnitee, and the payment of expenses).
Failure to receive notice from Indemnitee shall not relieve Indemnitor of any
liability which it might otherwise have to Indemnitee under Section 7.2 or
Section 7.3 hereof, unless Indemnitee's failure to deliver such notice has
materially prejudiced Indemnitor's ability to defend the claim; provided,
however, that this provision shall not serve to extend the indemnification
provided herein beyond any applicable period of survival set forth in Section
7.7. Any Indemnitee shall have the right to employ separate counsel in any such
action or claim and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of the Indemnitor unless
(i) the Indemnitor shall have failed, within a reasonable time after having been
notified by the Indemnitee of the existence of such claim as provided in the
preceding sentence, to assume the defense of such claim, (ii) the employment of
such counsel has been specifically authorized by the Indemnitor, or (iii) the
named parties to any such action (including any impleaded parties) include both
such Indemnitee and Indemnitor and such Indemnitee shall have been advised in
writing by such counsel that there may be one or more legal defenses available
to it that were different from or additional to those available to Indemnitor.
If the Indemnitor, within a reasonable time after notice of any such third party
claim, fails to defend the Indemnitee against which such claim has been
asserted, the Indemnitee shall (upon further notice to Indemnitor) have the
right to undertake the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the Indemnitor, subject to the right of the
Indemnitor to assume the defense of such claim at any time prior to settlement,
compromise or final determination thereof. Except as otherwise herein provided,
no Indemnitor shall be liable to indemnify any Indemnitee for any settlement of
any such action or claim affected without the consent of the Indemnitor, but if
settled with the written consent of the Indemnitor, or if there be a final
judgment for the plaintiff or claimant in any such action, the Indemnitor shall
indemnify and hold harmless each Indemnitee from and against any loss or
liability by reason of such settlement or judgment.
7.5 PARENT CLAIMS PAYABLE FROM ESCROW FUNDS. During the Escrow Period,
pursuant to the terms of the Escrow Agreement, Parent may be made whole by
payments from Escrow Funds for any Damages incurred by the Company or Parent for
which the Company or Parent is indemnified pursuant to Section 7.2.
7.6 REMEDIES CUMULATIVE. Except as herein expressly provided, the
remedies provided herein shall be cumulative and shall not preclude assertion by
the Company or the
<PAGE> 26
26
Parent of any other rights or the seeking of any other remedies against any
other party hereto.
7.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the parties in this Agreement shall survive the Closing and
shall continue for the period of two (2) years following the Closing Date,
except for the representations and warranties stated in Section 3.10, which
shall survive the Closing and shall continue for the period of three (3) years
following the Closing Date.
ARTICLE 8
DEFINITIONS
Unless the context otherwise requires, the terms defined below shall
have the meanings specified, both for purposes of this Agreement and all
Exhibits and Schedules hereto, unless otherwise specifically defined in such
Exhibits and Schedules. All accounting terms shall, except as otherwise provided
for herein, be construed in accordance with generally accepted accounting
principles. The masculine form of words includes the feminine and the neuter and
vice versa, and, unless the context otherwise requires, the singular form of
words includes the plural and vice versa. The words "herein," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular section or subsection.
"Accredited Investor" has the meaning set forth in 17 CFR 203.215
(Securities Act of 1933, General Rules and Regulations, Rule 215).
"Acquisition Subsidiary" has the meaning set forth in the introductory
paragraph.
"Affiliate" means, as applied to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Group" shall have the meaning specified in Section 1504 of
the Code.
"Agent" means any person or entity acting at the direction of the
person or entity specified.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this document.
"Ancillary Documents" means agreements, certificates, written
statements, instruments or other documents delivered by or on behalf of either
party hereto to the other party.
<PAGE> 27
27
"Audited Financial Statements" shall have the meaning set forth in
Section 3.7 hereof.
"Board" means any management board, board of directors, supervisory
board or any other body possessing oversight powers.
"Cash Consideration" shall have the meaning set forth in Section
2.2(b)(i) hereof.
"Certificate of Merger" shall have the meaning set forth in Section 1.3
hereof.
"Closing" shall have the meaning set forth in Section 1.2 hereof.
"Closing Date" shall have the meaning set forth in Section 1.2 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning set forth in the introductory
paragraph.
"Company Share" means a single share of the Company's stock.
"Company Stock" shall have the meaning set forth in Section 3.2 hereof.
"Confidential Information" means all non-public information concerning
the business, operations, ownership and assets of the Company, including all
notes, analyses, compilations, studies, interpretations or other documents
prepared by third parties that contain, reflect or are based upon, in whole or
in part, any information provided by a Stockholder or the Company to such third
party. Confidential Information does not include information that (i) is or
becomes generally available to the public other than as a result of a disclosure
by such third party, (ii) was within such third party's possession prior to its
being furnished to such third party by or on behalf of a Stockholder or the
Company pursuant to a confidentiality agreement, provided that the source of
such information was not known by the third party to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to a Stockholder or the Company or any other party
with respect to such information or (iii) becomes available to the third party
on a non-confidential basis from a source other than a Stockholder or the
Company, provided that such source is not bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to a
Stockholder or the Company or any other party with respect to such information.
"Consulting Agreement" shall have the meaning set forth in Section 5.9
hereof.
"Damages" means all losses, liabilities, costs and expenses.
"DGCL" means the Delaware General Corporation Law.
<PAGE> 28
28
"Director" means the members of the management or supervisory boards,
or the equivalent, of the Company.
"Dissenting Shares" shall have the meaning set forth in Section
2.1(c)(i) hereof.
"Effective Date" shall have the meaning set forth in Section 1.3
hereof.
"Encumbrances" means any title defects or objections, mortgages, liens,
claims, restrictive covenants, use restrictions, charges, pledges, security
interests or other encumbrances of any nature whatsoever including, without
limitation, conditional sales contracts, collateral security arrangements and
other title or interest retention arrangements.
"Environmental Law" means any federal, land, state, local, or foreign
law (including, without limitation, common law), treaty, regulation, rule,
judgment, order, injunction, permit or governmental restriction or requirement
or any agreement with any Governmental Entity, whether now or hereafter in
effect, relating to human health and safety, the environment or to pollutants,
contaminants, wastes or chemicals or any hazardous substances, wastes or
materials.
"Escrow Agent" shall have the meaning set forth in Section 2.2(b)(i)
hereof.
"Escrow Agreement" shall have the meaning set forth in Section
2.2(b)(ii) hereof.
"Escrow Funds" shall have the meaning set forth in Section 2.2(b)(ii)
hereof.
"Escrow Period" means the term of the escrow, which pursuant to the
Escrow Agreement shall terminate upon the distribution of all of the Escrow
Funds.
"Exhibit" means an exhibit attached to this Agreement and incorporated
into this Agreement.
"GAAP" means generally accepted accounting principles as applied,
except as expressly stated otherwise.
"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) and any national, county, municipal, communal, domestic,
foreign or other administrative agency, department, commission, board, bureau,
council, or other governmental authority or instrumentality.
"Hazardous Substances" means any hazardous substance, hazardous
material, toxic substance, pollutant, contaminant, oil, asbestos or radioactive
material, including without limitation any substance or material defined or
regulated as such under any United States federal or state environmental law, or
with respect to which a person or entity may be subject to liability.
<PAGE> 29
29
"Indemnitee" shall have the meaning set forth in Section 7.4(a) hereof.
"Indemnitee's Certificate" shall have the meaning set forth in Section
7.4(a) hereof.
"Indemnitor" shall have the meaning set forth in Section 7.4(a) hereof.
"Intellectual Property" means all patents, trademarks, trademark
licenses, trade names, business names, brand names, slogans, copyrights, reprint
rights, franchises, licenses, authorizations, processes, formulas, trade
secrets, registered designs, copyrights and any similar rights in any country,
and all rights under pending applications, continuations-in-part, extensions,
licenses and consents in relation to any of the foregoing.
"Labor Agreement" shall have the meaning set forth in Section 3.13
hereof.
"Laws" means all applicable laws (whether statutory or otherwise),
rules, regulations, ordinances, judgments, decrees, orders, writs and
injunctions of all Governmental Entities.
"Leased Premises" shall have the meaning set forth in Section 3.25
hereof.
"License" means a permit, granted by an appropriate governmental body,
generally for a consideration, necessary for the Company to carry on its
business in the places and in the manner in which such business is now
conducted.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1 hereof.
"Material Agreement" means any written or oral agreement or
understanding of a value greater than $10,000 per annum or as specified in
Schedule 3.31.
"Merger" shall have the meaning set forth in Section 1.1 hereof.
"Merger Consideration" shall have the meaning set forth in Section 2.2
hereof and is in the amount as set forth in Schedule 2.2(a)(i).
"Merger Price" shall have the meaning set forth in Section 2.2 hereof.
"Option Exercise Notice" shall have the meaning set forth in Section
2.1(d) hereof.
"Owned Premises" shall have the meaning set forth in Section 3.25
hereof.
"Outstanding Options" shall have the meaning set forth in Section
2.1(d) hereof.
"Parent" shall have the meaning set forth in the introductory
paragraph.
"Parent Claims" shall have the meaning set forth in Section 7.2 hereof.
<PAGE> 30
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"Permits" means all registrations, licenses, permits, consents,
approvals and authorizations issued by any Governmental Entity necessary for the
Company to carry on its business in the places and in the manner in which such
business is now conducted.
"Permitted Liabilities" shall have the meaning set forth in Section
3.28 hereof.
"Person" means any individual or business entity.
"Plan" means any bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance, hospitalization or other medical, life
or other insurance, supplemental unemployment benefit, profit sharing, pension,
or retirement plan, program, agreement or arrangement.
"Related Party" shall have the meaning set forth in Section 3.24
hereof.
"Requisite Stockholder Approval" stockholder approval required by the
DGCL.
"Schedule" means a schedule attached to this Agreement and incorporated
into this Agreement.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien (whether arising by contract or by operation
of law), other than (i) mechanic's, materialmen's, and similar liens, (ii) liens
arising under worker's compensation, unemployment insurance, social security,
retirement, and similar legislation, and (iii) liens on goods in transit
incurred pursuant to documentary letters of credit, in each case arising in the
ordinary course of business consistent with past custom and practice (including
with respect to frequency and amount) of the Company and that would not have a
Material Adverse Effect on the Company, taken as a whole.
"Stockholders' Claims" shall have the meaning set forth in Section 7.3
hereof.
"Stockholders' Representative" means Andrew Campbell, who has been
selected and appointed by resolution of the Board of Directors, and who shall be
ratified by resolution of the stockholders, of the Company to accept the Cash
Consideration on behalf of the stockholders of the Company and to distribute the
Cash Consideration to such stockholders, and to pay certain liabilities of the
stockholders. In addition the Stockholders' Representative shall be selected and
appointed by resolution of the stockholders of the Company to represent and/or
file any claims against Parent, Acquisition Subsidiary or the Surviving
Corporation.
"Surviving Corporation" shall have the meaning set forth in Section 1.1
hereof.
"Taxes" means all federal, state, local or foreign income, corporation,
payroll, transfer, withholding, excise, value added, sales, use, salary, customs
duties, social security, real and personal property, occupancy, business,
capital gains, securities transfer,
<PAGE> 31
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trade or other, tax (including interest and penalties thereon and including
estimated taxes thereof).
"Unvested Options" shall have the meaning set forth in Section
2.1(d)(ii) hereof.
ARTICLE 9
MISCELLANEOUS
9.1 GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to conflicts of laws principles.
9.2 CHOICE OF FORUM. Any judicial proceeding brought against any of the
parties to this Agreement on any dispute arising out of this Agreement or any
matter related hereto may be brought to a board of arbitration convened under
the rules of the American Arbitration Association to take place in Boston,
Massachusetts or in the courts of the Commonwealth of Massachusetts, or in the
United States District Court for the District of Massachusetts, and, by
execution and delivery of this Agreement, each of the parties to this Agreement
accepts the exclusive jurisdiction of such courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
foregoing consents to jurisdiction and appointments of agents to receive service
of process shall not constitute general consents to service of process in the
Commonwealth of Massachusetts for any purpose except as provided above and shall
not be deemed to confer rights on any person other than the respective parties
to this Agreement.
9.3 NOTICES, ETC. All notices, requests, demands and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing. Notice shall be deemed to have been duly given if
personally delivered or transmitted by first class, registered or certified
mail, postage prepaid, expedited delivery service or facsimile, to the party to
whom it is to be given at the address of such party set forth below or to such
other address for notice as such party shall provide in writing pursuant this
Section 9.3:
If to Parent or OneSource Information Services, Inc.
Acquisition Subsidiary: 300 Baker Avenue
Concord, MA 01742
Attention: Daniel Schimmel, President & CEO
Telephone: (978) 318-4300
Facsimile: (978) 318-4690
E-mail: Dan [email protected]
--------------------------
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With a copy to: OneSource Information Services, Inc.
300 Baker Avenue
Concord, MA 01742
Attention: Legal Department
Telephone: (978) 318-4300
Facsimile: (978) 318-4690
If to the Company: Corporate Technology Information
Services, Inc.
12 Alfred Street, #200
Woburn, MA 01801
Attention: Andrew Campbell
Telephone: (781) 932-3100
Facsimile: (781) 938-7511
E-mail: [email protected]
----------------------
With a copy to: Jager, Smith & Stetler, P.C.
One Financial Center
Boston, MA 02111
Attention: Edward Gerard Jager
Telephone: (617) 951-0500
Facsimile: (617) 951-2414
E-mail: [email protected]
--------------------
If to the Stockholders' Andrew Campbell
Representative: 243 East Main Street
Gloucester, Massachusetts 01930
with a copy to: Jager, Smith & Stetler, P.C.
One Financial Center
Boston, MA 02111
Attention: Edward Gerard Jager
Telephone: (617) 951-0500
Facsimile: (617) 951-2414
E-mail: [email protected]
--------------------
9.4 ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein that form a part hereof, contains the entire understanding of
the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
9.5 AMENDMENTS. This Agreement may be amended only by an instrument in
writing duly executed by the party against whom enforcement of such amendment is
sought.
<PAGE> 33
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9.6 WAIVERS. Any failure of the Company to comply with any of its
obligations or agreements herein contained may be waived only in writing by
Parent. Any failure of Parent or Acquisition Subsidiary to comply with any of
its obligations or agreements herein contained may be waived only in writing by
the Company.
9.7 COUNTERPARTS; HEADINGS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. The headings herein
set out are for convenience of reference only and shall not be deemed a part of
this Agreement.
9.8 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns, but no party hereto may assign,
delegate or otherwise transfer any of its rights, duties or obligations
hereunder or interest herein without the written consent of the other party
hereto; provided, however, that Parent may transfer its rights hereunder to any
entity owned by or under common control with Parent.
9.9 COSTS. Except as otherwise provided in this Agreement, each party
shall bear the costs of its own legal, accounting and other fees and expenses
incurred in connection with the negotiation, execution and performance of this
Agreement and the transactions contemplated herein.
9.10 SEVERABILITY. In the event that one or several provisions of this
Agreement should be or become invalid or unenforceable, or if this Agreement is
incomplete, the validity of and the enforceability of the other provisions of
this Agreement shall not be affected thereby. In such case the parties hereto
shall agree on such valid and enforceable provision or provisions completing
this Agreement that are commensurate with the commercial intent of this
Agreement.
<PAGE> 34
34
IN WITNESS WHEREOF, each of the parties has executed this Agreement by
its duly authorized representative as of the day and year first above written.
ONESOURCE INFORMATION
SERVICES, Inc.
By: /s/ Daniel Schimmel
-------------------------------------------
Daniel Schimmel
President & CEO
ONESOURCE CONTENT
CORPORATION
By: /s/ Daniel Schimmel
-------------------------------------------
Daniel Schimmel
President & CEO
CORPORATE TECHNOLOGY
INFORMATION SERVICES, INC.
By: /s/ Andrew Campbell
-------------------------------------------
Andrew Campbell
President
/s/ Andrew Campbell
-----------------------------------------------
Andrew Campbell,
as Stockholders' Representative
<PAGE> 1
Exhibit 2.2
ESCROW AGREEMENT
This Escrow Agreement is entered into as of September 8, 1999 (the
"Closing Date") by and among OneSource Information Services, Inc., a Delaware
corporation (the "Parent"), Corporate Technology Information Services, Inc., a
Delaware corporation (the "Company"), on behalf of its stockholders, Andrew
Campbell (the "Stockholders' Representative") and Citizens Bank of Massachusetts
(the "Escrow Agent").
WHEREAS, the Parent and the Company have entered into an Agreement and
Plan of Merger dated of even date herewith (the "Merger Agreement"), pursuant to
which the Acquisition Subsidiary of the Parent will merge with the Company as
specified in the Merger Agreement;
WHEREAS, the Merger Agreement provides that an escrow fund be
established to secure certain obligations, representations and warranties of the
Company to the Parent under the Merger Agreement on the terms and conditions set
forth herein;
WHEREAS, the Board of Directors of the Company has appointed a
Stockholders' Representative, who shall represent the interests of said
stockholders after the Effective Date, as such term is defined in the Merger
Agreement; and
WHEREAS, the parties hereto desire to establish the terms and
conditions pursuant to which such escrow fund will be established and
maintained.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Agreement and not
otherwise defined shall have the respective meanings given them in the Merger
Agreement.
2. ESCROW; INDEMNIFICATION.
(a) ESCROW FUND. At the Closing, the Parent shall deposit with
the Escrow Agent, by wire transfer or delivery of a certified check of the
Parent payable to the Escrow Agent, the Merger Price. On the Effective Date, and
upon notice by the Parent and the Stockholders' Representative, the Escrow Agent
shall release to the Stockholders' Representative the Merger Price, less One
Million Dollars ($1,000,000.00). Said One Million Dollars, together with
interest thereon, is referred to herein as the "Escrow Fund". The Escrow Fund
shall be held in an account designated as "CorpTech Stockholders Escrow Fund" or
in an account having another similar designation. The Escrow Agent agrees to
accept delivery of the Escrow Fund and to hold such Escrow Fund in escrow
subject to the terms and conditions of this Agreement.
(b) INDEMNIFICATION. The Company, on behalf of its
stockholders and acting through the Stockholders' Representative, has agreed in
Section 7.2 of the Merger
<PAGE> 2
2
Agreement to indemnify and hold harmless the Parent, Acquisition Subsidiary and
the Surviving Corporation from and against Parent Claims. The Escrow Fund shall
be security for the indemnity obligation of the Company under said Section 7.2,
subject to the limitations and in the manner provided in this Agreement and the
Merger Agreement.
3. STOCKHOLDERS' REPRESENTATIVE AS ATTORNEY-IN-FACT. The Company shall
cause the stockholders of the Company to ratify the Stockholders' Representative
as the attorney-in-fact of the stockholders of the Company for the purpose of
carrying out the provisions of this Agreement and the Merger Agreement and
taking any action and executing or completing any instruments that the
Stockholders' Representative may deem necessary or advisable to accomplish said
purposes, which appointment as attorney-in-fact is irrevocable and coupled with
an interest. In the event the Stockholders' Representative shall, at any time,
be unwilling or unable to act as such attorney-in-fact, then a replacement for
such person shall be designated by the stockholders of the Company owning a
majority interest in the Escrow Funds. The Parent shall assume that the
Stockholders' Representative is acting as attorney-in-fact, unless it receives
written notice signed by stockholders of the Company owning a majority interest
in the Escrow Funds that another attorney-in-fact has been appointed. All action
taken by the Stockholders' Representative shall, in order to be effective, be in
writing and signed by the Stockholders' Representative. In addition, the Parent
shall be entitled to rely upon, and to treat as duly authorized and approved by
the stockholders of the Company and the Stockholders' Representative, any and
all instructions, directions, letters, paper, documents or other notices
believed by Parent to be genuine and to have been signed by the Stockholders'
Representative.
4. ADMINISTRATION OF ESCROW FUND. Claims for payment of Parent Claims
from the Escrow Fund made by the Parent pursuant to Section 7.2 of the Merger
Agreement shall be made in accordance with the procedures set forth in this
Section 4.
(a) The Parent shall promptly give written notice of such
claim (a "Claim Notice") including, when known, the facts constituting the basis
for such claim and the amount or an estimate of the amount of the claimed Parent
Claims (the "Claimed Amount") to the Stockholders' Representative and the Escrow
Agent.
(b) Within fifteen (15) calendar days after delivery of a
Claim Notice, the Stockholders' Representative shall provide to the Parent, with
a copy to the Escrow Agent, a written response (the "Response Notice") in which
the Stockholders' Representative shall: (i) agree that all of the Claimed Amount
may be released from the Escrow Fund to the Parent; (ii) agree that part, but
not all, of the Claimed Amount (the "Partial Amount") may be released from the
Escrow Fund to the Parent; or (iii) contest the release of the entire Claimed
Amount from the Escrow Fund to the Parent. The Stockholders' Representative may
contest the release from escrow of all or a portion of the Claimed Amount only
based upon its good faith belief that all or such portion of the Claimed Amount
does not constitute Parent Claims for which the Parent is entitled to
indemnification under Section 7.2 of the Merger Agreement. The Escrow Agent
shall have
<PAGE> 3
3
no duty to determine whether the Parent's claim is valid, to verify such good
faith belief of the Company or to inquire into the factual basis of any claim or
response. If no Response Notice is delivered by the Stockholders' Representative
within such 15-day period, the Stockholders' Representative shall be deemed to
have agreed that all of the Claimed Amount may be released to the Parent from
the Escrow Fund.
(c) If the Stockholders' Representative in the Response Notice
agrees (or is deemed to have agreed) that all of the Claimed Amount may be
released from the Escrow Fund to the Parent, the Escrow Agent shall, promptly
following the earlier of the required delivery date for the Response Notice or
the delivery of the Response Notice, disburse to the Parent from the Escrow Fund
an amount equal to the Claimed Amount (or such lesser amount as is then held in
the Escrow Fund).
(d) If the Stockholders' Representative in the Response Notice
states that the Partial Amount may be released from the Escrow Fund to the
Parent, the Escrow Agent shall promptly following the delivery of the Response
Notice disburse to the Parent from the Escrow Fund an amount equal to the
Partial Amount set forth in such Response Notice (or such lesser amount as is
then held in the Escrow Fund).
(e) If the Stockholders' Representative in the Response Notice
contests the release of all or part of the Claimed Amount (the "Contested
Amount"), the Escrow Agent shall continue to hold in the Escrow Fund an amount
sufficient to cover the Contested Amount (up to the amount then available in the
Escrow Fund), notwithstanding the occurrence of the Preliminary Termination Date
(as defined in Section 5(d)), until delivery to the Escrow Agent of (i) a copy
of a settlement agreement executed by the Parent and the Stockholders'
Representative setting forth instructions to the Escrow Agent as to the
disbursements, if any, that shall be made with respect to the Contested Amount
or (ii) a copy of a final order, decree or judgment by a board of arbitration
convened under the rules of the American Arbitration Association or court of
competent jurisdiction with respect to the disbursement of the Contested Amount,
the time for perfection of an appeal of such order, decree or judgment having
expired or having been waived by the parties. The Escrow Agent shall thereupon
disburse amounts from the Escrow Fund (to the extent such amounts are then held
in the Escrow Fund) to the Parent in accordance with such settlement agreement
or order, decree or judgment.
5. RELEASE OF ESCROW FUND.
(a) Promptly after the first anniversary of the Closing Date,
the Escrow Agent shall distribute to the Stockholders' Representative the amount
necessary to reduce the Escrow Fund to the greater of the following amounts: (x)
Seven Hundred Fifty Thousand Dollars ($750,000.00); or (y) the amount sufficient
to cover all Claimed Amounts relating to Claim Notices given on or prior to such
first anniversary and remaining unresolved on such first anniversary. If a Claim
is reduced, cancelled or withdrawn after the first anniversary of the Closing
Date, amounts over Seven Hundred
<PAGE> 4
4
Fifty Thousand Dollars ($750,000.00) shall be immediately distributed to the
extent of the amount of the reduced, cancelled or withdrawn Claim.
(b) Promptly after the date that is eighteen (18) months
following the Closing Date (the "18-Month Date"), the Escrow Agent shall
distribute to the Stockholders' Representative the amount necessary to reduce
the Escrow Fund to the greater of: (x) Five Hundred Thousand Dollars
($500,000.00); or (y) the amount sufficient to cover all Claimed Amounts
relating to Claim Notices given on or prior to the 18-Month Date and remaining
unresolved on the 18-Month Date. If a Claim is reduced, cancelled or withdrawn
after the 18-Month Date, amounts over Five Hundred Thousand Dollars
($500,000.00) shall be immediately distributed to the extent of the amount of
the reduced, cancelled or withdrawn Claim.
(c) Promptly after the second anniversary of the Closing Date,
the Escrow Agent shall distribute to the Stockholders' Representative an amount
equal to the excess, if any, of the amount then held in the Escrow Fund over the
amount sufficient to cover all Claimed Amounts relating to Claim Notices given
on or prior to such anniversary and remaining unresolved on such anniversary.
(d) For purposes of this Agreement, the "Preliminary
Termination Date" shall be the second anniversary of the Closing Date. If any
amounts remain in the Escrow Fund following the Preliminary Termination Date,
such amounts, plus interest earned thereon, shall be retained by the Escrow
Agent in the Escrow Fund as provided in Section 4(e) hereof.
6. INVESTMENT OF ESCROW FUND.
(a) Between the Closing and Effective date, the money
representing the Merger Price held by the Escrow Agent shall be invested by the
Escrow Agent, to the extent permitted by law and as directed in writing by the
Parent, in (i) obligations issued or guaranteed by the United States of America
or any agency or instrumentality thereof, (ii) obligations (including
certificates of deposit and bankers' acceptances) of banks, including those of
the Escrow Agent in its commercial capacity, which at the date of their last
public reporting had total assets in excess of $500,000,000, (iii) commercial
paper rated at least A-1 or P-1 or, if not rated, issued by companies having
outstanding debt rated at least AA or Aa and (iv) money market mutual funds
invested exclusively in some or all of the securities described in the foregoing
clauses (i), (ii) and (iii).
(b) Any monies held in the Escrow Fund shall be invested by
the Escrow Agent, to the extent permitted by law and as directed in writing by
the Stockholders' Representative, in (i) obligations issued or guaranteed by the
United States of America or any agency or instrumentality thereof, (ii)
obligations (including certificates of deposit and bankers' acceptances) of
banks, including those of the Escrow Agent in its commercial capacity, which at
the date of their last public reporting had total assets in excess of
$500,000,000, (iii) commercial paper rated at least A-1 or P-1 or, if not rated,
<PAGE> 5
5
issued by companies having outstanding debt rated at least AA or Aa and (iv)
money market mutual funds invested exclusively in some or all of the securities
described in the foregoing clauses (i), (ii) and (iii).
(c) Between the Closing Date and the Effective Date, one-half
of any interest that has been earned on the funds held pursuant to this
Agreement shall become part of the Escrow Account and be distributed pursuant to
the terms of this Agreement in the same manner as other funds in the Escrow
Account, whereas the remaining one-half shall be paid to the Parent promptly
after the Effective Date. After the Effective Date, any interest that has been
earned on any portion of the Escrow Fund shall become part of the Escrow Account
and be distributed pursuant to the terms of this Agreement in the same manner as
other funds in the Escrow Account.
7. FEES AND EXPENSES. The Parent shall be liable for all costs
associated with the administration of the Escrow Fund, including but not limited
to the fees of the Escrow Agent, reasonable legal fees and expenses for the
services rendered by the Escrow Agent hereunder. The Escrow Agent shall be
entitled to reimbursement on demand for all expenses incurred in connection with
the administration of the escrow created hereby that are in excess of its
compensation for normal services hereunder, including without limitation payment
of any legal fees and expenses incurred by the Escrow Agent in connection with
the resolution of any claim by any party hereunder or in the determination of
any other matter arising hereunder. As between them, the Parent, on the one
hand, and the stockholders of the Company, on the other, shall each be liable
for reimbursement of one-half of such expenses; provided, however, that the
obligation of the stockholders of the Company may only be satisfied from the
amounts held in the Escrow Fund at the time such reimbursement is sought.
8. LIMITATION OF ESCROW AGENT'S LIABILITY.
(a) Neither the Escrow Agent nor any of its directors,
officers or employees shall incur liability with respect to any action taken or
suffered by it in reliance upon any notice, certificate, direction, instruction,
consent, statement or other document reasonably believed by it to be genuine and
duly authorized, nor for other action or inaction except its own willful
misconduct or gross negligence. The Escrow Agent shall not be responsible for
the validity or sufficiency of this Agreement and shall not be responsible for
any of the agreements referred to herein, including the Merger Agreement, but
shall be obligated only for the performance of such duties as are specifically
set forth in this Agreement. In all questions arising under this Agreement, the
Escrow Agent may rely on the advice of counsel, including in-house counsel, and
for anything done, omitted or suffered in good faith by the Escrow Agent based
on such advice the Escrow Agent shall not be liable to anyone. The Escrow Agent
shall not be required to take any action hereunder involving any expense unless
the payment of such expense is made or provided for in a manner reasonably
satisfactory to it. The Escrow Agent shall not be liable for any losses
resulting from the investments made in accordance with this Agreement (excepting
losses upon its obligations). In no event shall the Escrow Agent be liable for
indirect,
<PAGE> 6
6
punitive, special or consequential Parent Claims or claim by the Company, its
shareholders or the Shareholders' Representative.
(b) The Parent and the stockholders of the Company jointly and
severally hereby agree to indemnify the Escrow Agent for, and hold it harmless
against, any loss, liability or expense (including reasonable attorneys' fees
and expenses) incurred without gross negligence or willful misconduct on the
part of the Escrow Agent, arising out of or in connection with its carrying out
of its duties hereunder. As between them, the Parent, on the one hand, and the
stockholders of the Company, on the other, shall each be liable for one-half of
the foregoing indemnification obligation to the Escrow Agent; provided, however,
that the obligation of the stockholders of the Company may only be satisfied
from the amounts held in the Escrow Fund at the time such indemnification is
sought.
(c) The Parent and the stockholders of the Company jointly and
severally hereby agree to assume any and all obligations imposed now or
hereafter by any applicable tax law with respect to the payment of amounts held
in the Escrow Fund under this Agreement, and to indemnify and hold the Escrow
Agent harmless:
(i) from and against any taxes, additions for late
payment, interest, penalties and other expenses, that may be assessed against
the Escrow Agent in respect of any such payment or other activities under this
Agreement; and
(ii) from any liability on account of taxes,
assessments or other governmental charges, including without limitation the
withholding or deduction or the failure to withhold or deduct the same, and any
liability for failure to obtain proper certifications or to properly report to
governmental authorities, to which the Escrow Agent may be or become subject in
connection with or which arises out of this Agreement, including costs and
expenses (including reasonable legal fees and expenses), interest and penalties.
As between them, the Parent, on the one hand, and the stockholders of the
Company, on the other, shall each be liable for one-half of the foregoing
indemnification obligation to the Escrow Agent; provided, however, that the
obligation of the stockholders of the Company may only be satisfied from the
amounts held in the Escrow Fund at the time such indemnification is sought. The
Parent and the Stockholders' Representative shall undertake to instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Agreement. However, the Stockholders' Representative
shall be responsible for all tax reporting related to funds distributed to him
by the Escrow Agent. The parties hereto agree that, for tax reporting purposes,
all interest or other income earned in the Escrow Fund shall be allocable to the
Stockholders, except as otherwise contemplated in Section 6(c). Notwithstanding
anything to the contrary in this Section 8(c) the Escrow
<PAGE> 7
7
Agent shall be solely responsible for all taxes (and any related interest,
penalties and other expenses) in the nature of income taxes on the Escrow
Agent's net income.
9. LIMITATION OF THE PARTIES' LIABILITY. Neither Parent, Company,
Shareholders nor Shareholders' Representative shall be liable to any of the
others for liabilities or claims related to losses due to the investments of the
Escrow Fund or interest thereon.
10. TERMINATION. This Agreement shall terminate upon the later of the
Preliminary Termination Date or the disbursement by the Escrow Agent of the
Escrow Funds in accordance with this Agreement; provided that the provisions of
Section 8 shall survive such termination.
11. NOTICES. Any notices, instructions or other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or other communication shall be sent either (i) by registered or
certified mail, return receipt requested, postage pre-paid, or (ii) via a
reputable nationwide overnight courier service, in each case to the address set
forth below. Any such notice, instruction or communication shall be deemed to
have been delivered four business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one business day
after it is sent via a reputable nationwide overnight courier service.
If to the Parent: OneSource Information Services, Inc.
300 Baker Avenue
Concord, MA 01742
Attention: Daniel Schimmel, President & CEO
With a copy to: OneSource Information Services, Inc.
300 Baker Avenue
Concord, MA 01742
Attention: Legal Department
If to the Company: Corporate Technology Information Services, Inc.
12 Alfred Street, #200
Woburn, MA 01801
Attention: Andrew Campbell
Telephone: (781) 932-3100
Facsimile: (781) 938-7511
E-mail: [email protected]
----------------------
<PAGE> 8
8
with a copy to: Jager, Smith & Stetler, P.C.
One Financial Center
Boston, MA 02111
Attention: Edward Gerard Jager
Telephone: (617) 951-0500
Facsimile: (617) 951-2414
E-mail: [email protected]
--------------------
If to the Stockholders' Andrew Campbell
Representative: 243 East Main Street
Gloucester, Massachusetts 01930
with a copy to: Jager, Smith & Stetler, P.C.
One Financial Center
Boston, MA 02111
Attention: Edward Gerard Jager
Telephone: (617) 951-0500
Facsimile: (617) 951-2414
E-mail: [email protected]
--------------------
If to the Escrow Agent: Citizens Bank
Corporate Trust Department
1 Citizens Plaza
Providence, RI 02903
Attention: Kathleen Taddei
Telephone: (401) 456-7684
Facsimile: (401) 455-5268
E-mail: [email protected]
--------------------------------
Any party may change the address to which notices, instructions or
communications are to be delivered by giving the other parties to this Agreement
notice thereof in the manner set forth in this Section 11.
12. SUCCESSOR ESCROW AGENT. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity hereunder, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by
delivering a resignation to the parties to this Agreement, not less than 60
days' prior to the date when such resignation shall take effect. The Parent may
appoint a successor Escrow Agent without the consent of (but with notice to) the
Stockholders' Representative so long as such successor is a bank with assets of
at least $500 million, and may appoint any other successor Escrow Agent with the
consent of the Stockholders' Representative, which consent shall not be
unreasonably withheld or delayed. If, within such notice period, the Parent
provides to the Escrow Agent written instructions with respect to the
appointment of a successor Escrow Agent and directions for the transfer of any
Escrow Fund then held
<PAGE> 9
9
by the Escrow Agent to such successor, the Escrow Agent shall act in accordance
with such instructions and promptly transfer such Escrow Fund to such designated
successor. If the Parent names no successor escrow agent within such notice
period, the Escrow Agent may apply to a court of competent jurisdiction for
appointment of a successor escrow agent.
13. GENERAL.
(a) GOVERNING LAW. This Agreement shall be governed by,
enforced under and construed in accordance with the laws of the Commonwealth of
Massachusetts without regard to conflict-of-law principles.
(b) COUNTERPARTS. This Agreement may be executed in two or
more counterparts (all of which need not be signed by all of the parties
hereto), each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
(c) ENTIRE AGREEMENT. This Agreement, together with the Merger
Agreement (with respect to the Parent, the Company and the Stockholders'
Representative only), constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings, written or oral between the parties with respect
to the subject matter hereof.
(d) WAIVERS. No waiver by any party hereto of any condition or
of any breach of any provision of this Agreement shall be effective unless in
writing. No waiver by any party of any such condition or breach, in any one
instance, shall be deemed to be a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach of any other
provision contained herein.
(e) AMENDMENT. This Agreement may be amended only by a written
instrument signed by the Parent, the Escrow Agent and the Company (or the
Stockholders' Representative, as the case may be).
(f) DISPUTE RESOLUTION. It is understood and agreed that
should any dispute arise with respect to the delivery, ownership, right of
possession, and/or disposition of the Escrow Fund, or should any claim be made
upon the Escrow Fund by a third party, the Escrow Agent upon receipt of written
notice of such dispute or claim by the parties hereto or by a third party, is
authorized and directed to retain in its possession without liability to anyone,
all or any of the Escrow Fund until such dispute shall have been settled either
by the mutual written agreement of the parties involved, by a board of
arbitration convened under the rules of the American Arbitration Association or
by a final order, decree or judgment of a court in the United States of America,
the time for perfection of an appeal of such order, decree or judgment having
expired or having been waived by the parties. The Escrow Agent may, but shall be
under no duty whatsoever to, institute or defend any legal proceedings that
relate to the Escrow Fund.
<PAGE> 10
10
(g) CONSENT TO JURISDICTION AND SERVICE. The Parent and the
Company, on behalf of itself and the Stockholders' Representative, hereby
absolutely and irrevocably consent and submit to a board of arbitration convened
under the rules of the American Arbitration Association to take place in Boston,
Massachusetts or the jurisdiction of the courts in the Commonwealth of
Massachusetts and of any federal court located in the Commonwealth of
Massachusetts in connection with any actions or proceedings brought against the
Parent or the Company by the Escrow Agent arising out of or relating to this
Agreement. In any such action or proceeding, the Parent and the Company, on
behalf of itself and the Stockholders' Representative, hereby absolutely and
irrevocably waive personal service of any summons, complaint, declaration or
other process and hereby absolutely and irrevocably agree that the service
thereof may be made in accordance with the notice provisions of Section 11
hereof, directed to the Parent or the Company or the Stockholders'
Representative, as the case may be, at their respective addresses set forth in
Section 11 hereof.
(h) FORCE MAJEURE. None of the Parent, the Company, the
Stockholders' Representative or the Escrow Agent shall be responsible for delays
or failures in performance resulting from acts beyond its or his control. Such
acts shall include but not be limited to acts of God, strikes, lockouts, riots,
acts of wars, epidemics, governmental regulations superimposed after the fact,
fire, communication line failures, computer viruses, power failures, earthquakes
or other disasters.
(i) BINDING EFFECT; ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective parties hereto and their heirs,
executors, successors and assigns.
(j) REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating thereto, including, without limitation, (i) consents, waivers
and modifications which may hereafter be executed, and (ii) certificates and
other information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
<PAGE> 11
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ONESOURCE INFORMATION
SERVICES, INC.
By: /s/ Daniel Schimmel
----------------------------------------
Daniel Schimmel
President & CEO
CORPORATE TECHNOLOGY
INFORMATION SERVICES, INC.
By: /s/ Andrew Campbell
----------------------------------------
Andrew Campbell
President
/s/ Andrew Campbell
--------------------------------------------
Andrew Campbell,
as Stockholders' Representative
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Kathleen Coldwell Taddei
----------------------------------------
Name: Kathleen Coldwell Taddei
Title: Senior Vice President
<PAGE> 1
Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Donna M. Tocci, 617-520-9105
[email protected]
Lawrence Crimmins, 617-520-9153
[email protected]
Christine Eyre, 978-318-4325
[email protected]
ONESOURCE INFORMATION SERVICES TO ACQUIRE CORPORATE
TECHNOLOGY INFORMATION SERVICES
ONESOURCE SIGNIFICANTLY ENHANCES PRIVATE COMPANY INFORMATION
CONCORD, MASS., SEPTEMBER 9, 1999 -- OneSource Information Services, Inc.
(NASDAQ: ONES), the first place professionals go for comprehensive business
information on the Web, today announced that it has signed a definitive
agreement to acquire Corporate Technology Information Services, Inc. (CorpTech)
for approximately $8 million in cash. CorpTech, a privately held firm based in
Woburn, Massachusetts, is a provider of high technology company profiles with a
special focus on emerging private companies.
"OneSource customers are among the most sophisticated and demanding consumers of
business information in the world today," said Dan Schimmel, president and CEO
of OneSource Information Services. "One of their most consistently requested
enhancements is for more high quality, in-depth information on US private
companies. As a result of our acquisition of CorpTech, we will own a valuable
brand and a critical portion of the private company information that we provide
in our products. In addition, we will have the opportunity to direct editorial
priorities to ensure that we address completely our customers needs."
CorpTech is a leader in private company information, collecting research on more
than 50,000 high technology businesses. With over 4,000 clients, CorpTech
generated $5.2 million in revenue last fiscal year through multiple channels
including the web, CDs, print and third party distributors such as OneSource.
CorpTech customers will continue to receive these high quality offerings.
<PAGE> 2
"CorpTech has enjoyed a long and profitable relationship with OneSource, who is
currently our largest and most rapidly growing partner," stated Andrew Campbell,
CorpTech's President and co-founder. "This is a true win-win opportunity. Our
customers will gain access to OneSource's comprehensive business information,
fully integrated with our high quality data, with significant expansion
planned."
"We believe the CorpTech acquisition will have a number of strategic benefits
which will enhance OneSource's leadership position," stated Schimmel. "For
example, the acquisition should expand our customer base, increase our editorial
control and improve our operating margins. We intend to expand significantly on
CorpTech's franchise to create an unparalleled source for private company
information for our customers around the world."
Schimmel concluded, "After the acquisition, we will continue to execute our
growth strategy, which focuses on adding new customers, growing revenues within
existing customers and expanding our product line. In addition, we will continue
to pursue strategic acquisitions and alliances that afford OneSource a
competitive advantage in our marketplace and generate increased shareholder
value."
ABOUT ONESOURCE INFORMATION SERVICES
OneSource Information Services, Inc. provides Web-based business and financial
information to professionals who need quick access to reliable corporate,
industry and market intelligence. Its Business Browser product line provides
sales, marketing, finance and management professionals with textual information,
such as news, trade press, executive biographies and analyst reports. Business
Browser products also deliver numeric information such as company financial
results, stock quotes and industry statistics. OneSource integrates business and
financial information on over one million global public and private companies
from more than 25 information providers drawing upon over 2,500 sources of
content.
Business Browser products are designed to address information needs of leading
professional and financial services firms, technology companies and other large
organizations including American Express, British Telecom, Deloitte & Touche,
KPMG, Oracle and SAP. OneSource is headquartered in Concord, MA, with offices
across the United States and United Kingdom. Product information is available by
calling 1-800-554-5501 in the U.S. and +44 (0)1483 241212 in the UK, and at
WWW.ONESOURCE.COM.
This news release contains certain forward-looking statements that are based on
the current beliefs and expectations of the company's management, as well as
assumptions made by, and information currently available to, the company's
management. Such statements include those regarding the company's ability to
pursue its corporate objectives and strategy, market acceptance of new products,
the expansion of its customer base, and improvement of operating margins.
Because such statements involve risks and uncertainties, actual actions and
strategies and the timing and expected results thereof
<PAGE> 3
may differ materially from those expressed or implied by such forward-looking
statements, and the company's future results, performance, or achievements could
differ materially from those expressed in, or implied by, any such
forward-looking statements. In addition to the factors noted above, other risks,
uncertainties, assumptions, and factors that could affect the company's
financial results are described in the company's initial public offering
prospectus dated May 19, 1999.
OneSource and Business Browser are service marks of OneSource Information
Services, Inc. All other products and services are trademarks or service marks
of their respective companies.
