SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 23, 1995
ROBOTIC VISION SYSTEMS, INC.
(Exact name of Registrant as specified in charter)
Delaware 0-8623 11-2400145
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification Number)
incorporation)
425 Rabro Drive East, Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 273-9700
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<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 23, 1995, Registrant consummated an
acquisition transaction contemplated by an Agreement and Plan of
Merger and Reorganization dated as of October 20, 1995 (the "Merger
Agreement"), with International Data Matrix, Inc., a privately
owned company located in Clearwater, Florida ("IDM"), whereby IDM
became a wholly-owned subsidiary of Registrant (the "IDM Merger").
IDM markets a line of 2-D Data Matrix code readers.
The Merger Agreement provided that each then outstanding
share of IDM common stock would be converted into the right to
receive, and become exchangeable for (the "Exchange Ratio"), 2.558
shares of Registrant's Common Stock. Based upon the Exchange
Ratio, Registrant will issue approximately 369,870 shares of its
common stock to IDM's stockholders.
The IDM Merger was structured as a tax-free
reorganization and will be accounted for by Registrant as a pooling
of interests.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of IDM.*
(i) Report of Deloitte & Touche LLP,
Independent Auditors;
(ii) Balance Sheets of IDM as of September 30,
1995 and December 31, 1994;
(iii) Statements of Operations of IDM for the
nine months ended September 30, 1995 and
the year ended December 31, 1994;
(iv) Statements of Stockholders' Equity of IDM
for the nine months ended September 30,
1995 and the year ended December 31,
1994;
(v) Statements of Cash Flows of IDM for the
nine months ended September 30, 1995 and
the year ended December 31, 1994;
(vi) Notes to the Financial Statements of IDM.
<PAGE>
(b) Pro Forma Financial Information.*
(i) Unaudited Combined Summary of Pro Forma
Statements of Operations for the years
ended September 30, 1995, 1994, and 1993;
(ii) Unaudited Pro Forma Combined Balance
Sheet as of September 30, 1995;
(iii) Unaudited Pro Forma Combined Statements
of Operations for the Years Ended
September 30, 1995, 1994 and 1993; and
(iv) Notes to Unaudited Pro Forma Financial
Information.
(c) Exhibits.
(i) Agreement and Plan of Merger and Reorga-
nization dated as of October 20, 1995 by
and among Robotic Vision Systems, Inc.,
RVSI Second Acquisition Corp. and
International Data Matrix, Inc.
* Registrant's provision of historical financial statements of
IDM and pro forma financial information relating to the Merger
within 15 days after the Merger, as prescribed by Regulation
S-X, promulgated by the Securities and Exchange Commission, is
impracticable. Registrant will file such historical financial
statements and pro forma financial information no later than
75 days after the Merger.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 1, 1995 ROBOTIC VISION SYSTEMS, INC.
(Registrant)
By: /s/Robert H. Walker
Robert H. Walker
Executive Vice President
AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION, dated as of October 20, 1995
(this "Agreement"), by and among ROBOTIC VISION
SYSTEMS, INC., a Delaware corporation ("Parent"),
RVSI SECOND ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of Parent
(the "Subsidiary"), and INTERNATIONAL DATA
MATRIX, INC., a Florida corporation (the "Company").
The Boards of Directors of Parent, the Subsidiary and the Company, and
the stockholders of the Company have approved the merger of the Subsidiary
with and into the Company pursuant to this Agreement (the "Merger") and the
transactions contemplated hereby upon the terms and subject to the conditions
set forth herein.
It is intended that the Merger shall qualify for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and that the Merger shall be
recorded for accounting purposes as a pooling of interests.
Parent, the Company and Dennis Priddy, the chief executive officer and a
stockholder of the Company ("Priddy"), desire to make certain representations,
warranties, covenants and agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 1.2 below),
the Subsidiary shall be merged with and into the Company in accordance with
the provisions of Section 252 of the Delaware General Corporation Law (the
"DGCL") and of Section 607.1107 of the Florida Business Corporation Act (the
"FBCA"), with the effect provided in Sections 259 - 261 of the DGCL and
Section 607.1106 of the FBCA, and the separate existence of the Subsidiary
shall thereupon cease. The Company shall be the surviving corporation in the
Merger (hereinafter sometimes referred to as the "Surviving Corporation") and
shall continue to be governed by the laws of the State of Florida. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time of the Merger, (a) the Surviving Corporation shall possess all
assets and property of every description, and every interest therein, wherever
located, and the rights, privileges, immunities, powers, franchises and
authority, of a public as well as of a private nature, of each of the
Subsidiary and the Company, (b) all obligations belonging to or due each of
the Subsidiary and the Company shall be vested in, and become the obligations
of, the Surviving Corporation without further act or deed, (c) title to any
real estate or any interest therein vested in either of the Subsidiary and
the Company shall not revert or in any way be impaired by reason of the
Merger, (d) all rights of creditors and all liens upon any property of any of
the Subsidiary and the Company shall be preserved unimpaired, and (e) the
Surviving Corporation shall be liable for all of the obligations of each of
the Subsidiary and the Company and any claim existing, or action or
proceeding pending, by or against either of the Subsidiary and
the Company may be prosecuted to judgment with right of appeal, as if the
Merger had not taken place.
SECTION 1.2 Effective Time of the Merger. The Merger shall become
effective at such time (the "Effective Time") as a Certificate of Merger, in
the form set forth as Exhibit I hereto, is filed with the Secretary of State
of the State of Delaware and the Secretary of State of the State of Florida
(the "Merger Filings"), such filings shall be made concurrently with or as
soon as practicable after the execution and delivery of this Agreement.
SECTION 1.3 Disclosure Schedules. Simultaneously with the execution
of this Agreement, (a) the Company is delivering to Parent a schedule relating
to the Company (the "Company Disclosure Schedule"), and (b) Parent is
delivering to the Company a schedule relating to Parent and the Subsidiary
(the "Parent Disclosure Schedule" and collectively with the Company Disclosure
Schedule, the "Disclosure Schedules") setting forth the matters required to
be set forth in the Disclosure Schedules as described elsewhere in this
Agreement. The Disclosure Schedules shall be deemed to be part of this
Agreement.
ARTICLE II
SURVIVING AND PARENT CORPORATIONS
SECTION 2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Company as in effect immediately prior to the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation,
until duly amended in accordance with the terms thereof and of the FBCA.
SECTION 2.2 By-Laws. The By-laws of the Company as in effect
immediately prior to the Effective Time shall be the By-laws of the Surviving
Corporation until duly amended in accordance with their terms and as provided
by the Certificate of Incorporation of the Surviving Corporation and the FBCA.
SECTION 2.3 Directors. The sole director of the Subsidiary at the
Effective Time shall, from and after the Effective Time, be the sole director
of the Surviving Corporation until his successor has been duly elected or
appointed and qualified or until his earlier death, resignation or removal in
accordance with the Surviving Corporation's Certificate of Incorporation and
By-laws.
SECTION 2.4 Officers. The officers of the Subsidiary at the Effective
Time shall, from and after the Effective Time, be the officers of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Certificate of Incorporation
and By-Laws.
SECTION 2.5 Further Action. If at any time after the Effective Time,
Parent shall consider that any further deeds, assignments, conveyances,
agreements, documents, instruments or assurances in law or any other things
are necessary or desirable to vest, perfect, confirm or record in the
Surviving Corporation the title to any property, rights, privileges, powers
and franchises of the Subsidiary by reason of, or as a result of, the Merger,
or otherwise to carry out the provisions of this Agreement, the officers of
the Subsidiary shall execute and deliver, upon Parent's reasonable request,
any instruments or assurances, and do all other things necessary or proper to
vest, perfect, confirm or record title to such property, rights, privileges,
powers and franchises in the Surviving Corporation, and otherwise to carry
out the provisions of this Agreement.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 Shares of the Constituent and the Surviving Corporations.
The manner and basis of converting the shares of common stock of the Company
into shares of common stock of Parent shall be as follows:
(a) Conversion Ratio.
(1) Each share of common stock, $.01 par value, issued and
outstanding of the Company (collectively, the "Company Stock")
shall, by virtue of the Merger and without any action on the
part of the holder thereof, or any other action whatsoever,
be converted into shares of validly issued, fully paid and
nonassessable common stock, $.01 par value, of Parent
(collectively, the "Parent Merger Stock") as follows: the
number of shares of Parent Merger Stock into which each
outstanding share of Company Stock shall be converted shall
equal the product of one (1) multiplied by a fraction (such
fraction is herein called the "Conversion Ratio") whose
numerator shall be 369,870.36 and whose denominator shall be
144,598.
(2) Each share of common stock, $.01 par value, of the
Subsidiary, issued and outstanding, shall, by virtue of the
Merger and without any action on the part of the holder
thereof, or any other action whatsoever, be converted into
one share of validly issued, fully paid and nonassessable
common stock, $.01 par value, of the Company.
(b) No Fractional Shares. No rights to receive fractional shares
of or interests in fractional Parent Merger Stock shall arise under
this Agreement, and no certificates or scrip representing fractional
Parent Merger Stock shall be issued hereunder. Upon surrender of a
certificate or certificates previously evidencing the Company Stock,
any fractional share interest or interests in Parent Merger Stock
which the holder of such certificate or certificates would otherwise
be entitled to receive shall be paid by Parent to such holder by
check based upon $21.6292 for a full share of Parent Merger Stock.
SECTION 3.2 Exchange of Certificates.
(a) From and after the Effective Time, each holder of an outstanding
certificate immediately prior to the Effective Time represented shares
of Company Common Stock (the "Company Certificates") shall cease to have
any right as a stockholder of the Company and such holder's sole rights
shall be to receive in exchange for such holder's Company Certificates,
upon surrender thereof to an exchange agent selected by Parent (the
"Exchange Agent"), a certificate or certificates representing the number
of whole shares of Parent Common Stock which such holder is entitled to
receive pursuant to Section 3.1(a) plus cash in lieu of fractional
shares, as provided in Section 3.1(b) hereof. Notwithstanding any other
provision of this Agreement, (i) until holders of Company Certificates
theretofore representing shares of Company Common Stock have surrendered
such certificates for exchange as provided herein, (A) no dividends
shall be paid by the Parent with respect to any shares represented by
such Company Certificates and (B) no payment for fractional shares shall
be made, provided, in each case, that upon surrender of such Company
Certificates, the surrendering holder shall receive all such dividends
and payments for fractional shares and (ii) without regard to when such
Company Certificates are surrendered for exchange as provided herein, no
interest shall be paid on any such dividend or payment for fractional
shares. If any certificate for shares of Parent Common Stock is to be
issued in a name other than that in which the certificate for shares of
Company Common Stock surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for such shares of Parent Common Stock in a
name other than that of the registered holder of the certificate
surrendered, or shall establish to the satisfaction of Parent that such
tax has been paid or is not applicable. No transfers of Company Common
Stock shall be made on the stock transfer books of the Company after the
close of business on the day prior to the date of the Effective Time.
(b) At or before the Effective Time, Parent shall make available to
the Exchange Agent a sufficient number of certificates representing
shares of Parent Common Stock required to effect the exchange referred
to in Section 3.2(a).
(c) Promptly after the Effective Time, Parent shall cause the
Exchange Agent to mail to each holder of record of the Company
Certificates (i) a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Company
Certificates shall pass, only upon actual delivery of the Company
Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Company Certificates in exchange for
certificates representing shares of Parent Common Stock. Upon surrender
of the Company Certificates for cancellation to the Exchange Agent,
together with a duly executed letter of transmittal and such other
documents as the Exchange Agent shall reasonably require, the holder of
such Company Certificates shall be entitled to receive in exchange
therefor one or more certificates representing that number of whole
shares of Parent Common Stock into which the shares of Company Common
Stock theretofore represented by the Company Certificates so surrendered
shall have been converted pursuant to the provisions of Section 3.1(a),
in addition to payment for any fractional share or dividend of Parent
Common Stock, and the Company Certificates so surrendered shall forthwith
be cancelled. Until so surrendered, the Company Certificates shall
represent solely the right to receive the number of whole shares of
Parent Common Stock that shall be issued in exchange for Company Common
Stock, the payment of any related dividends as contemplated by Section
3.2(a), and any cash in lieu of the fractional Parent Common Stock as
contemplated by Section 3.1(b). Notwithstanding the foregoing, neither
the Exchange Agent nor any party hereto shall be liable to a holder of
shares of Company Common Stock for any shares of Parent Common Stock
delivered to a public official as required by applicable abandoned
property, escheat or similar laws. The Exchange Agent shall not be
entitled to vote or exercise any rights of ownership with respect to
Parent Common Stock held by it from time to time hereunder.
(d) From and after the Effective Time, Parent shall be entitled to
treat outstanding certificates which immediately prior to the Effective
Time represented shares of Subsidiary Common Stock as evidencing the
ownership of the number of full shares of Surviving Corporation Common
Stock, which the holder of the shares of Subsidiary Common Stock
represented by such certificates is entitled to receive pursuant to
Section 3.1(c), and the holder of such certificates shall not be
required to surrender such certificates for exchange. Shares of
Surviving Corporation Common Stock which the holder of shares of
Subsidiary Common Stock is entitled to receive in the Merger shall be
deemed to have been issued at the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND OF PRIDDY
The Company and Priddy jointly and severally represent and warrant
to Parent as follows, with the knowledge and understanding that Parent is
relying materially upon such representations and warranties:
SECTION 4.1 Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Florida. The Company has all requisite corporate
power to carry on its business as it is now being conducted and is duly
qualified to do business as a foreign corporation and is in good standing
in all jurisdictions set forth in Schedule 4.1 of the Company Disclosure
Schedule, and to the knowledge of the Company and Priddy, such
jurisdictions are the only ones in which the properties owned, leased or
operated by the Company or the nature of the business conducted by the
Company makes such qualification necessary, except where the failure to
qualify (individually or in the aggregate) will not have any material
adverse effect on the business or prospects of the Company. The copies
of the Certificate of Incorporation and By-laws of the Company, as
amended to date and delivered to Parent, are true and complete copies of
these documents as now in effect. The minute books of the Company are
accurate in all material respects.
SECTION 4.2 Capitalization. The authorized capital stock of the
Company, the number of shares of capital stock which are issued and
outstanding, the par value thereof and the record and beneficial holders
thereof are as set forth in the Company Disclosure Schedule. All of such
shares of capital stock that are issued and outstanding are duly
authorized, validly issued and outstanding, fully paid and nonassessable,
and were not issued in violation of the preemptive rights of any person.
Except as set forth in the Company Disclosure Schedule or as otherwise
disclosed therein and herein, there are no subscriptions, options,
warrants, rights or calls or other commitments or agreements to which the
Company is a party or by which it is bound, calling for any issuance,
transfer, sale or other disposition of any class of securities of the
Company. Other than as set forth in the Company Disclosure Schedule,
there are no outstanding securities convertible or exchangeable, actually
or contingently, into common stock or any other securities of the Company.
SECTION 4.3 Subsidiaries. Except as set forth in the Company
Disclosure Schedule, the Company does not own any capital stock in any
other corporation or similar business entity nor is the Company a partner
in any partnership or joint venture.
SECTION 4.4 Authority. The Company's Board of Directors has
approved and adopted this Agreement and the Merger and has adopted a
resolution recommending approval and adoption of this Agreement and the
Merger by the Company's stockholders, and the Company's stockholders have
approved and adopted this Agreement and the Merger. This Agreement
constitutes the valid and binding obligation of the Company, enforceable
in accordance with its terms.
SECTION 4.5 Properties. Except as set forth in the Company
Disclosure Schedule, the Company has good and marketable title to all of
the assets and properties which it purports to own as reflected on the
most recent balance sheet comprising a portion of the Financial
Statements (as hereinafter defined), or thereafter acquired. The Company
has a valid leasehold interest in all material properties of which it is
the lessee and each such lease is valid, binding and enforceable against
the Company, and, to the knowledge of the Company and Priddy, the other
parties thereto in accordance with its terms. Neither the Company nor to
the knowledge of the Company and Priddy, the other parties thereto are in
default in the performance of any material provision thereunder. Neither
the whole nor any material portion of the assets of the Company is
subject to any governmental decree or order to be sold or is being
condemned, expropriated or otherwise taken by any public authority with
or without payment of compensation therefor, nor, to the knowledge of the
Company and Priddy, has any such condemnation, expropriation or taking
been proposed. Except as set forth in the Company Disclosure Schedule,
none of the material assets of the Company is subject to any restriction
which would prevent continuation of the use currently made thereof or
materially adversely affect the value thereof.
SECTION 4.6 Contracts; No Default.
(a) Schedule 4.6(a) of the Company Disclosure Schedule consists of
a true and complete list of all contracts, agreements, commitments and
other instruments (whether oral or written) to which the Company is a
party that (i) involve a receipt or an expenditure by the Company or
require the performance of services or delivery of goods to, by, through,
on behalf of or for the benefit of the Company, which in each case,
relates to a contract, agreement, commitment or instrument that either
(A) requires payments or receipts in excess of $10,000 per year or (B)
is not terminable by the Company on notice of thirty (30) days or less
without penalty or the Company being liable for damages, or (ii) involve
an obligation for the performance of services or delivery of goods by
the Company that cannot, or in reasonable probability will not, be
performed within thirty (30) days from the dates as of which these
representations are made.
(b) All of the contracts, agreements, commitments and other
instruments described in Schedule 4.6(a) of the Company Disclosure
Schedule (individually, "Contract" and collectively, the "Contracts")
are valid and binding upon the Company, and to the knowledge of the
Company and Priddy, the other parties thereto and are in full force and
effect and enforceable in accordance with their terms, and neither the
Company, nor to the knowledge of the Company and Priddy, any other party
to any Contract has breached any provision of, and no event has occurred
which, with the lapse of time or action by a third party, could result
in a material default under, the terms thereof. To the knowledge of the
Company and Priddy, no stockholder of the Company has received any
payment from any contracting party in connection with or as an
inducement for causing the Company to enter into any Contract.
SECTION 4.7 Litigation. There is no claim, action, proceeding,
or investigation pending or, to the knowledge of the Company and Priddy,
threatened against or affecting the Company before or by any court,
arbitrator or governmental agency or authority which, in the reasonable
judgment of the Company and Priddy, could have a material adverse effect
on the financial condition, operations or prospects of the Company. There
is no strike or unresolved labor dispute relating to the Company's
employees which, in the reasonable judgment of the Company and Priddy,
could have a material adverse effect on the business or prospects of the
Company. There are no decrees, injunctions or orders of any court,
governmental department, agency or arbitration outstanding against the
Company.
SECTION 4.8 Taxes. For purposes of this Agreement, (A) "Tax"
(and, with correlative meaning, Taxes") shall mean any federal, state,
local or foreign income, alternative or add-on minimum, business,
employment, franchise, occupancy, payroll, property, sales, transfer,
use, value added, withholding or other tax, levy, impost, fee,
imposition, assessment or similar charge together with any related
addition to tax, interest, penalty or fine thereon; and (B) "Returns"
shall mean all returns (including, without limitation, information
returns and other material information), reports and forms relating to
Taxes.
The Company has duly filed all Returns required to be filed by it
other than Returns (individually and in the aggregate) where the failure
to file would have no material adverse effect on the business or
prospects of the Company. All such Returns were, when filed, and to the
knowledge of the Company and Priddy are, accurate and complete in all
material respects and were prepared in conformity with applicable laws
and regulations. The Company has paid or will pay in full or has
adequately reserved against all Taxes otherwise assessed against it
through the Closing Date.
The Company is not a party to any pending action or proceeding by
any governmental authority for the assessment of any Tax, and, to the
knowledge of the Company and Priddy, no claim for assessment or
collection of any Tax related to the Company has been asserted against
the Company that has not been paid. There are no Tax liens upon the
assets (other than the lien of property taxes not yet due and payable)
of the Company. There is no valid basis, to the knowledge of the
Company and Priddy, except as set forth in the Company Disclosure
Schedule, for any assessment, deficiency, notice, 30-day letter or
similar intention to assess any Tax to be issued to the Company by any
governmental authority.
SECTION 4.9 No Violation of Law. The Company is not in violation
of and has not been given notice or been charged with any violation of,
any law, statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental law,
ordinance or regulation) of any governmental or regulatory body or
authority, except for violations which, in the aggregate, do not have,
and would not reasonably be expected to have, a material adverse effect
on the financial condition, operations or prospects of the Company. The
Company has not received any written notice that any investigation or
review with respect to it by any governmental or regulatory body or
authority is pending or threatened, other than, in each case, those the
outcome of which, as far as reasonably can be foreseen, would not
reasonably be expected to have, a material adverse effect on the
financial condition, operations or prospects of the Company. The
Company has all permits, licenses, franchises, variances, exemptions,
orders and other governmental authorizations, consents and approvals
necessary to conduct its business as presently conducted (collectively
its "Permits"), except for permits, licenses, franchises, variances,
exemptions, orders, authorizations, consents and approvals the absence
of which, alone or in the aggregate, would not have a material adverse
effect on the financial condition, operations or prospects of the
Company. The Company (a) has duly and timely filled all reports and
other information required to be filed with any governmental or
regulatory authority in connection with its Permits, and (b) is not in
violation of the terms of any of its Permits, except for omissions or
delays in filings, reports or violations which, alone or in the
aggregate, would not have a material adverse effect on the financial
condition, operations or prospects of the Company. The Company
Disclosure Schedule contains a list of Permits.
SECTION 4.10 Environmental Matters. The Company is and at all
times has been in compliance in all material respects with all
applicable requirements of Environmental Laws (as defined below) in
connection with the ownership, operation and conditions of the business
of the Company. To its knowledge, there are no PCBs, underground
storage tanks (as defined by Environmental Laws), asbestos materials or
asbestos containing materials in any property leased, owned or operated
by the Company. The Company has not released, transported or arranged
for the disposal of any hazardous substance at any facility, location or
site except in material compliance with all applicable laws. To the
knowledge of the Company and Priddy, no conditions exist or have
occurred as a result of which or in connection with which the Company
could be held liable for damages, response or remedial costs, fines,
penalties, sanctions or equitable relief under any Environmental Laws,
except for such damages, costs, fines, penalties, sanctions or relief
which, alone or in the aggregate, would not have a material adverse
effect on the financial condition, operations or prospects of the
Company. As used in this Section, "Environmental Laws" means any
federal, state or local statute, regulation, ordinance, permit, order,
judgment, decree or decision relating to health, safety or the
environment. "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
active disposal or passive disposal (including the abandonment or
discarding of barrels, containers or other closed receptacles containing
any hazardous substances). "Hazardous substance" means (a) any
"hazardous substance" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, ("CERCLA")
and any implementing regulations, (b) any hazardous or toxic substance,
waste or material within the meaning of any other federal, state or
local statute, regulation, ordinance or decision, (c) any pollutant,
contaminant orspecial waste regulated by any Environmental Laws, or (d)
petroleum, crude oil or any fraction thereof.
SECTION 4.11 List of Stockholders. Set forth as Schedule 4.11 is
a complete and accurate list of all stockholders of the Company setting
forth the name, address and number of shares of Company Stock owned by
each stockholder. The number of such stockholders who are not
accredited investors (as hereinafter defined) is less than 35. The term
"accredited investor" is used herein as defined in Rule 501 of
Regulation D of the General Rules and Regulations under the Securities
Act of 1933, as amended (the "Securities Act"), promulgated by the
Securities and Exchange Commission (the "SEC"). Each stockholder has
been informed by the Company that the certificates representing Parent
Merger Stock shall bear the restrictive legends referred to in Schedule
7.1.
SECTION 4.12 Insurance. The Company is covered by insurance
policies, or renewals thereof, as identified and described in the
Company Disclosure Schedule. The Company has not received notice from
any insurer or agent of such insurer that material improvements or
expenditures will have to be made in order to continue such insurance
and, so far as known to the Company and Priddy, no such improvements or
expenditures are required (other than premium payments). There is no
material liability under any insurance policy in the nature of a
retroactive rate adjustment or loss sharing or similar arrangement
except as set forth on the Company Disclosure Schedule.
SECTION 4.13 Condition of Assets. The material equipment,
fixtures and other personal property of the Company is in good operating
condition and repair (ordinary wear and tear excepted) for the conduct
of its business as presently being conducted.
SECTION 4.14 No Breaches. The making and performance of this
Agreement and the other agreements contemplated hereby by the Company
will not (i) conflict with or violate the Certificate of Incorporation
or the by-laws of the Company, (ii) violate any laws, ordinances, rules,
or regulations, or any order, writ, injunction or decree to which the
Company is a party or by which the Company or any of its material assets,
businesses, or operations may be bound or affected or (iii) result in
any breach or termination of, or constitute a default under, or
constitute an event which, with notice or lapse of time, or both, would
become a default under, or result in the creation of any encumbrance
upon any material asset of the Company under, or create any rights of
termination, cancellation or acceleration in any person under, any
Contract.
SECTION 4.15 Employees. Except as set forth on the Company
Disclosure Schedule, none of the employees of the Company is represented
by any labor union or collective bargaining unit and the neither Company
nor Priddy is aware of any organizational efforts taking place with
respect to such representation.
SECTION 4.16 Financial Statements. The Company Disclosure
Schedule contains (i) an unaudited interim balance sheet as of September
30, 1995 and related unaudited interim income statement of the Company
for the nine month period ended September 30, 1995, (ii) an unaudited
interim balance sheet as of December 31, 1994 and related unaudited
income statement and statement of stockholder's equity of the Company
for the twelve month period ended December 31, 1994, (iii) an audited
balance sheet of the Company as of November 30, 1994 (collectively, the
"Financial Statements"). In connection with its audit of the balance
sheet of the Company as of November 30, 1994 the Company's auditors,
Ernst & Young, Tampa, Florida, observed the taking of the Company's
inventory as of December 31, 1994. The Financial Statements presently
fairly, in all material respects, the financial position and results of
operations of the Company as of the dates and periods indicated,
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"), subject, in the case of the unaudited
financial statements for the month of December 1994 and for the nine
month period ended September 30, 1995, to normal and recurring year-end
adjustments, which, individually or collectively, are not material to
the Company. Without limiting the generality of the foregoing, except
as set forth in the Company Disclosure Schedule, to the knowledge of the
Company and Priddy, there is no basis for any assertion against the
Company as of the date of said balance sheets of any material debt,
liability or obligation of any nature not fully reflected or reserved
against in the Financial Statements or in the notes thereto and there
are no assets of the Company, the value of which (in the reasonable
judgment of the Company and Priddy) is materially overstated in said
balance sheets. Except as disclosed therein or in the Company
Disclosure Schedule or as incurred in the ordinary course of business
since September 30, 1995, the Company has not incurred any material
contingent liabilities (including liabilities for taxes). The Company
is not a party to any contract or agreement for the forward purchase or
sale of any foreign currency.
SECTION 4.17 Absence of Certain Changes or Events. Except as set
forth in the Company Disclosure Schedule, since September 30, 1995 there
has not been:
(a) any material adverse change in the financial condition,
operations, properties, assets, liabilities or business of the
Company;
(b) any material damage, destruction or loss of any material
properties of the Company, whether or not covered by insurance;
(c) any material change in the manner in which the business of
the Company has been conducted;
(d) any material change in the treatment and protection of
trade secrets or other confidential information of the Company; and
(e) any occurrence not included in paragraphs (a) through (d)
of this Section 4.17 which has resulted, or which the Company has
reason to believe, might be expected to result, in a material
adverse change in the business or prospects of the Company.
SECTION 4.18 Employee Benefit Plans; ERISA.
(a) Except as set forth in the Company Disclosure Schedule, at the
date hereof the Company does not maintain or contribute to any employee
benefit plans, programs, arrangements and practices (such plans,
programs, arrangement and practices of the Company being hereinafter
collectively referred to as the "Company Plans"), including employee
benefit plans within the meaning set forth in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and all
regulations promulgated thereunder, as in effect from time to time
("ERISA"), or any written employment contracts providing for an annual
base salary in excess of $100,000 and having a term in excess of one
year, which contracts are not immediately terminable without penalty or
further liability, or other similar arrangements for the provision of
benefits (excluding any "Multiemployer Plan" within the meaning of
Section 3(37) of ERISA or a "Multiple Employer Plan" within the meaning
of Section 413(c) of the Code, and all regulations promulgated
thereunder, as in effect from time to time. The Company Disclosure
Schedule lists all Multiemployer Plans and Multiple Employer Plans which
the Company maintains or to which it makes contributions. The Company
has no obligation to create any additional such plan or to amend any
such plan so as to increase benefits thereunder, except as required
under the terms of the Company Plans, under existing collective
bargaining agreements or to comply with applicable law.
(b) Except as set forth in the Company Disclosure Schedule, (i)
there have been no prohibited transactions within the meaning of Section
406 and 407 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), with respect to any of the Company Plans
that could result in penalties, taxes or liabilities which, singly or in
the aggregate, could have a material adverse effect on the business,
operations, properties, assets, condition (financial or other) results
of operations or prospects of the Company, (ii) except for premiums due,
there is no outstanding liability in excess of $10,000, whether measured
alone or in the aggregate, under Title IV or ERISA with respect to any
of the Company Plans, (iii) neither the Pension Benefit Guaranty
Corporation nor any plan administrator has instituted proceedings to
terminate any of the Company Plans subject to Title IV of ERISA other
than in a "standard termination" described in Section 4041(b) of ERISA,
(iv) none of the Company Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent
fiscal year of each of the Company Plans ended prior to the date of this
Agreement, (v) the current present value of all projected benefit
obligations under each of the Company Plans which is subject to Title IV
of ERISA did not, as of its latest valuation date, exceed the then
current value of the assets of such plan allocable to such benefit
liabilities by more than the amount, if any, disclosed in the Financial
Statements as of November 30, 1994 (based upon reasonable actuarial
assumptions currently utilized for such Company Plan), (vi) each of the
Company Plans has been operated and administered in all material
respects in accordance with applicable laws during the period of time
covered by the applicable statute of limitations, (vii) each of the
Company Plans which is intended to be "qualified" within the meaning of
Section 401(a) of the Code has been determined by the IRS to be so
qualified and such determination has not been modified, revoked or
limited by failure to satisfy any condition thereof or by a subsequent
amendment thereto or a failure to amend, except that it may be necessary
to make additional amendments retroactively to maintain the "qualified"
status of such Company Plans, and the period for making any such
necessary retroactive amendments has not expired, (viii) with respect to
Multiemployer Plans, the Company has not made or suffered a "complete
withdrawal" or a "partial withdrawal," as such terms are respectively
defined in Sections 4203, 4204 and 4205 of ERISA and, to the knowledge
of the Company and Priddy, no event has occurred or is expected to occur
which presents a material risk of a complete or partial withdrawal under
said Sections 4203, 4204 and 4205, (ix) there are no pending or, to the
knowledge of the Company and Priddy, threatened or anticipated claims
involving any of the Company Plans other than claims for benefits in the
ordinary course, and (x) the Company has no current liability in excess
of $10,000, whether measured alone or in the aggregate, for plan
termination or withdrawal (complete or partial) under Title IV of ERISA
based on any plan to which any entity that would be deemed one employer
with the Company under Section 4001 of ERISA or Section 414 of the Code
contributed during the period of time covered by the applicable statute
of limitations (the "Company Controlled Group Plans"), and the Company
does not anticipate that any such liability will be asserted against the
Company, none of the Company Controlled Group Plans has an "accumulated
funding deficiency" (as defined in Section 302 of ERISA and 412 of the
Code), and no Company Controlled Group Plan has an outstanding funding
waiver which could result in the imposition of liens, excise taxes or
liability against the Company in excess of $10,000 whether measure alone
or in the aggregate.
SECTION 4.19 Business Locations. The Company does not own or
lease any real or material personal property in any state or country
except as set forth on the Company Disclosure Schedule. The Company has
no executive offices or places of business except as otherwise set forth
on the Company Disclosure Schedule.
SECTION 4.20 Customers and Suppliers. Except as set forth in the
Company Disclosure Schedule, neither the Company nor Priddy has any knowledge
that, either as a result of the transactions contemplated hereby or for any
other reason (exclusive of expiration of a contract upon the passage of time),
any customer (which accounted for an aggregate amount of 5% or more of the
Company's consolidated gross revenues within the preceding 12 months) or
material supplier of the Company will not continue to conduct business with
the Company after the date hereof in substantially the same manner as it has
conducted business with the Company in the past.
SECTION 4.21 Intellectual Property; Computer Software. (a)
Schedule 4.21 (a) of the Company Disclosure Schedule sets forth a complete
and correct list and summary description of all patents, material unpatented
inventions set forth in or described in writing, trademarks, tradenames,
service marks, service names, brand names and copyrights, registrations
thereof and applications therefore, applicable to or used in the business of
the Company, together with a complete list of all licenses granted by or to
the Company with respect to any of the above. All such patents, material
unpatented inventions, trademarks, tradenames, service marks, service names,
brand names and copyrights are owned by the Company, free and clear of all
liens, claims, security interests and encumbrances of any nature whatsoever.
The Company is not currently in receipt of any notice of any violation or
infringement of, and the Company is not knowingly violating or infringing,
the rights of others in any patent, unpatented invention, trademark,
tradename, service mark, copyright, trade secret, know-how, design, process
or other intangible asset.
(b) (i) Schedule 4.21(b)(i) of the Company Disclosure Schedule
contains a complete and accurate list of all computer software owned by the
Company (other than "off-the-shelf" software that has not been customized for
its use) (the "Owned Software"). Except as set forth on Schedule 4.21(b)(i)
of the Company Disclosure Schedule, the Company has exclusive title to the
Owned Software, free and clear of all claims, including claims or rights of
employees, agents, consultants, customers, licensees or other parties
involved in the development, creation, documentation, marketing, maintenance,
enhancement or licensing of such computer software. The Owned Software is
not dependent on any Licensed Software (as defined in subsection (ii) below)
in order to operate fully in the manner in which it is intended. No Owned
Software has been published or knowingly disclosed to any other parties,
except as set forth on Schedule 4.21(b)(i)of the Company Disclosure Schedule,
and except pursuant to contracts requiring such other parties to keep the
Owned Software confidential. To the knowledge of the Company and Priddy, no
such other party has breached any obligation of confidentiality.
(ii) Schedule 4.21(b)(ii) of the Company Disclosure
Schedule contains a complete and accurate list of all software under which
the Company is a licensee, lessee or otherwise has obtained the right to use
software and the Company pays a royalty for the use of such software (the
"Licensed Software"). Schedule 4.21(b)(ii) of the Company Disclosure
Schedule also sets forth a list of all license fees, rents, royalties or
other charges that the Company is required or obligated to pay with respect
to Licensed Software. The Company has the right and license to use,
sublicense, modify and copy Licensed Software, free and clear of any
limitations or encumbrances, except as may be set forth in Schedule
4.21(b)(ii) of the Company Disclosure Schedule. The Company is in material
compliance with all provisions of each license, lease or other similar
agreement pursuant to which it has rights to use the Licensed Software.
Except as disclosed on Schedule 4.21(b)(ii) of the Company Disclosure
Schedule, none of the Licensed Software has been incorporated into or made a
part of any Owned Software or any other Licensed Software. The Company has
not published or knowingly disclosed any Licensed Software to any other party
except, in the case of Licensed Software which the Company leases or markets
to others, in accordance with and as permitted by any license, lease or
similar agreement relating to the Licensed Software and except pursuant to
contracts requiring such other parties to keep the Licensed Software
confidential. To the knowledge of the Company and Priddy, no party to whom
the Company has disclosed Licensed Software has breached such obligation of
confidentiality.
(iii) The Owned Software and Licensed Software constitute
all material software used in the respective businesses of the Company
(collectively, the "Company Software"). Schedule 4.21(b)(iii) of the Company
Disclosure Schedule sets forth a list of all contract programmers,
independent contractors, nonemployee agents and persons or other entities
(other than employees) who have performed computer programming services for
the Company at any time since January 1, 1993 and identifies all contracts
and agreements pursuant to which such services were performed. The
transactions contemplated herein will not cause a breach or default under any
licensee, leases or similar agreements relating to the Company Software or
impair the ability of Parent and the Company to use the Company Software
subsequent to the date hereof in the same manner as the Company Software is
currently used by the Company. The Company is not knowingly infringing any
intellectual property rights of any other person or entity with respect to
the Company Software, and, to the knowledge of the Company and Priddy, no
other person or entity is infringing any intellectual property rights of the
Company with respect to the Company Software.
SECTION 4.22 Approvals. Except as set forth in Section 1.2 as to
the Merger Filings, no declaration, filing or registration with, or notice to,
or authorization, consent or approval of, any governmental or regulatory body
or authority or other person is necessary for execution and delivery of this
Agreement by the Company or consummation by the Company of the transactions
contemplated hereby, other than such declarations, filings, registrations,
notices, authorizations, consents or approvals which, if not made or obtained,
as the case may be, would not, in the aggregate, have a material adverse
effect on the Company.
SECTION 4.23 Transactions with Affiliates. Except as set forth in
the Company Disclosure Schedule, the Company is not indebted for money
borrowed, either directly or indirectly, from any of its officers, directors,
or any Affiliate (as defined below), in any amount whatsoever; nor are any of
its officers, directors, or Affiliates indebted for money borrowed from the
Company; nor are there any transactions of a continuing nature between the
Company; and any of its officers, directors, or Affiliates (other than by or
through the regular employment thereof by the Company) not subject to
cancellation which will continue beyond the Effective Time, including,
without limitation, use of the assets of the Company for personal benefit
with or without adequate compensation. For purposes of this Section, the
term "Affiliate" shall mean any person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, the person specified. As used in the foregoing definition,
the term (i) "control" shall mean the power through the ownership of voting
securities, contract or otherwise to direct the affairs of another person and
(ii) "person" shall mean an individual, firm, trust, association, corporation,
partnership, government (whether federal, state, local or other political
subdivision, or any agency or bureau of any of them) or other entity.
SECTION 4.24 Accounts Receivable. Except as set forth in the
Company Disclosure Schedule, all of the accounts receivable of the Company
included in the Financial Statements or otherwise reflect actual transactions,
have arisen in the ordinary course of business, will not, to the knowledge
of the Company and Priddy, be subject to offset or deduction and will be
collectible at the aggregate recorded amounts thereof net of any reserves
established in a manner consistent with part practices of the Company, all
as reflected in the Financial Statements.
SECTION 4.25 No Omissions or Untrue Statements. No representation
or warranty made by the Company or by Priddy to Parent in this Agreement,
the Company Disclosure Schedule or in any certificate of a Company officer
delivered to Parent pursuant to the terms of this Agreement contains any
untrue statement of a material fact, or omits to state a material fact
necessary to make the statements contained herein or therein not misleading
as of the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company and Priddy as follows,
with the knowledge and understanding that the Company and Priddy each is
relying materially on such representations and warranties:
SECTION 5.1 Organization and Standing of Parent. Parent is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Parent has all requisite corporate power to
carry on its business as now conducted and is duly qualified to do business
as a foreign corporation and is in good standing as a foreign corporation in
all jurisdictions set forth in Section 5.1 of the Parent Disclosure Schedule,
and to its knowledge, such jurisdictions are the only ones in which the
properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure
to be so qualified and in good standing will not have a material adverse
effect on it.
SECTION 5.2 The Subsidiary. The Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and has the corporate power to carry on its business as herein
contemplated and to own its assets and will not be required to qualify to
transact business as a foreign corporation in any state or other jurisdiction.
The copies of the certificate of incorporation and by-laws of the Subsidiary
(certified by the Secretary of the Subsidiary), as amended to date, and
delivered to the Company are true and complete copies of these documents as
now in effect. The authorized capital stock of the Subsidiary consists of
1,000 shares of common stock, par value $.01 per share, of which 100 shares
are issued and outstanding on the date hereof and owned of record and
beneficially solely by Parent.
SECTION 5.3 Parent's Authority. Parent's Board of Directors has
approved and adopted this Agreement and the Merger. No approval of this
Agreement or the Merger is required of Parent's stockholders. This Agreement
constitutes the valid and binding obligation of Parent, enforceable in
accordance with its terms.
SECTION 5.4 The Subsidiary's Authority. The Subsidiary's Board
of Directors and sole stockholder has approved and adopted this Agreement and
the Merger. This Agreement constitutes the valid and binding obligation of
the Subsidiary, enforceable in accordance with its terms.
SECTION 5.5 Contracts; No Default. All material contracts,
agreements, licenses, leases, easements, permits, rights of way, commitments,
and understandings, written or oral, connected with or relating in any
respect to the present operations of Parent (except employment or other
agreements terminable at will) are, with the exception of this Agreement,
described in Parent's SEC Reports (as hereinafter defined) and listed as
exhibits thereto (the "Parent Contracts"). To the knowledge of Parent, the
Parent Contracts are valid, binding and enforceable by Parent against the
other parties thereto in accordance with their terms. Neither Parent nor, to
the knowledge of Parent, any of the other parties thereto is in material
default or breach of any provision of the Parent Contracts.
SECTION 5.6 Litigation. Except as set forth in Parent's SEC
Reports, the there is no claim, action, proceeding, or investigation pending
or, to the knowledge of Parent, threatened against or affecting Parent
before or by any court, arbitrator or governmental agency or authority
which, in the reasonable judgment of Parent, could have a material adverse
effect on the financial condition, operations or prospects of Parent. There
is no strike or unresolved labor dispute relating to Parent's employees
which, in the judgment of Parent, could have a material adverse effect on
the business or prospects of Parent. There are no decrees, injunctions or
orders of any court, governmental department, agency or arbitration
outstanding against Parent.
SECTION 5.7 Taxes. Parent has duly filed all Returns required to
be filed by it other than Returns which the failure to file would have no
material adverse effect on the business of Parent. All such Returns were,
when filed, and to Parent's knowledge are, accurate and complete in all
material respects and were prepared in conformity with applicable laws and
regulations. Parent has paid or will pay in full or has adequately reserved
against all Taxes otherwise assessed against it through the date hereof.
Parent is not a party to any pending action or proceeding by any governmental
authority for the assessment of any Tax, and, to the knowledge of Parent, no
claim for assessment or collection of any Tax has been asserted against
Parent that has not been paid. There are no Tax liens upon the assets of
Parent (other than the lien of property taxes not yet due and payable).
There is no valid basis, to Parent's knowledge, for any assessment,
deficiency, notice, 30-day letter or similar intention to assess any Tax to
be issued to Parent by any governmental authority.
SECTION 5.8 No Violation of Law. Parent is not in violation of
and has not been given notice or been charged with any violation of, any law,
statute, order, rule, regulation, ordinance or judgment (including, without
limitation, any applicable environmental law, ordinance or regulation) of any
governmental or regulatory body or authority, except for violations which, in
the aggregate, do not have, and would not reasonably be expected to have, a
material adverse effect on the financial condition, operations or prospects
of Parent. Parent has not received any written notice that any investigation
or review with respect to it by any governmental or regulatory body or
authority is pending or threatened, other than, in each case, those the
outcome of which,as far as reasonably can be foreseen, would not reasonably
be expected to have, a material adverse effect on the financial condition,
operations or prospects of Parent.
SECTION 5.9 No Breaches. The making and performance of this
Agreement will not (i) conflict with the Certificate of Incorporation or the
By-laws of Parent, (ii) violate any laws, ordinances, rules, or regulations,
or any order, writ, injunction or decree to which Parent is a party or by
which Parent or any of its material assets, business, or operations may be
bound or affected or (iii) result in any breach or termination of, or
constitute a default under, or constitute an event which, with notice or
lapse of time, or both, would become a default under, or result in the
creation of any encumbrance upon any material asset of Parent under, or
create any rights of termination, cancellation, or acceleration in any person
under, any material agreement, arrangement, or commitment, or violate any
provisions of any laws, ordinances, rules or regulations or any order, writ,
injunction, or decree to which Parent is a party or by which Parent or any
of its material assets may be bound.
SECTION 5.10 Financial Statements. The financial statements of
Parent (collectively the "Parent Financial Statements") included in Parent's
SEC Reports present fairly, in all material respects, the financial position
of Parent as of the respective dates and the results of its operations for
the periods covered in accordance with GAAP and in accordance with Regulation
S-X of the SEC (subject, in the case of unaudited interim period financial
statements, to normal and recurring year-end adjustments which, individually
or collectively, are not material). Without limiting the generality of the
foregoing, (i) except as set forth in the Parent Disclosure Schedule, there
is no basis for any assertion against Parent as of the date of the most
recent balance sheet comprising a portion of the Parent Financial Statements
of any material debt, liability or obligation of any nature not fully
reflected or reserved against in the Parent Financial Statements or in the
notes thereto; and (ii) there are no assets of Parent, the value of which
(in the reasonable judgment of Parent) is materially overstated in the Parent
Financial Statements. Except as disclosed therein or in the Parent
Disclosure Schedule or as incurred in the ordinary course of business since
June 30, 1995, Parent has no known material contingent liabilities (including
liabilities for taxes). Parent is not a party to any contract or agreement
for the forward purchase or sale of any foreign currency.
SECTION 5.11 Absence of Certain Changes or Events. Except as set
forth in Parent's SEC Reports or in the Parent Disclosure Schedule, since
June 30, 1995 there has not been:
(a) any material adverse change in the financial condition,
operations, properties, assets, liabilities or business of
Parent;
(b) any material damage, destruction or loss of any material
properties of Parent, whether or not covered by insurance;
(c) any material change in the manner in which the business
of Parent has been conducted;
(d) any material change in the treatment and protection of
trade secrets or other confidential information of Parent;
(e) any occurrence not included in paragraphs (a) through
(d) of this Section 5.10 which has resulted, or which Parent
has reason to believe, might be expected to result, in a
material adverse change in the business or prospects of Parent.
SECTION 5.12 Parent's SEC Reports. Parent has filed all reports,
registrations and other documents, together with any amendments thereto,
required to be filed under the Securities Act and the Exchange Act (all such
reports, registrations and documents filed with the SEC since October 1, 1993
are collectively referred to as "Parent's SEC Reports"). As of their
respective dates, Parent's SEC Reports complied in all material respects with
all rules and regulations promulgated by the SEC and did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Parent
has provided to the Company a true and complete copy of all of Parent's SEC
Reports filed on or prior to the date hereof.
SECTION 5.13 Acuity Imaging. All references to Parent in this
Article V shall also be deemed to include Parent's wholly owned subsidiary,
Acuity Imaging, Inc., unless expressly indicated to the contrary.
SECTION 5.14 No Omission or Untrue Statement. No representation
or warranty made by Parent to the Company in this Agreement, in the Parent
Disclosure Schedule or in any certificate of a Parent officer delivered to
the Company pursuant to the terms of this Agreement contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements contained herein or therein not misleading as of the
date hereof.
ARTICLE VI
DELIVERIES
SECTION 6.1 The Company's Deliveries. Concurrently with its
execution and delivery of this Agreement, the Company shall deliver, or cause
to be delivered, to Parent:
(a) a certificate, duly executed by the Secretary of the
Company, certifying as to the Certificate of Incorporation and By-laws of the
Company, the incumbency and signatures of the Company's officers and copies
of directors' and stockholders' resolutions approving and authorizing the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby;
(b) an opinion of the Company's counsel, Goodman Weiss Miller,
in form and substance reasonably satisfactory to Parent;
(c) letter agreements addressed to Parent and signed by each
person who is an "affiliate" (as defined for purposes of paragraphs (c) and
(d) of Rule 145 under the Securities Act or used for purposes of Accounting
Series, Releases 130 and 135, as amended, of the SEC) of the Company, which
letters shall include an undertaking of such persons not to sell or otherwise
dispose of any Parent Merger Stock until Parent has set forth in a filing
with the SEC financial statements reflecting at least 30 days of post-Merger
combined operations of Parent and the Company;
(d) a certificate from the chief executive officer of the
Company as to certain tax matters; and
(e) evidence satisfactory to the Parent that holders of at
least 95% of the outstanding shares of Company Stock have either voted in
favor of the Merger or otherwise taken steps to preclude their assertion of
dissenter's rights of appraisal under the FBCA with respect to the Merger.
SECTION 6.2 Other Deliveries to Parent. Concurrently with its
execution and delivery of this Agreement, Parent shall receive:
(a) an opinion of Deloitte & Touche, LLP, Parent's independent
public accountants, stating that the Merger will qualify as a "pooling
of interests" transaction under generally accepted accounting
principles;
(b) letter agreements addressed to Parent and signed by each
person who is an "affiliate" (as defined for purposes of paragraphs
(c) and (d) of Rule 145 under the Securities Act or used for purposes
of Accounting Series, Releases 130 and 135, as amended, of the SEC) of
Parent, which letters shall include an undertaking of such persons not
to sell or otherwise dispose of any shares of Parent Common Stock
until Parent has set forth in a filing with the SEC financial
statements reflecting at least 30 days of post-Merger combined
operations of Parent and the Company;
(c) an opinion of Parker Duryee Rosoff & Haft to the effect
that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and
that no gain or loss will be recognized by the Parent or the
Subsidiary as a result of the Merger;
(d) non-competition agreement from Priddy in form reasonably
satisfactory to the Company; and
(e) evidence reasonably satisfactory to Parent of termination
of (i) the Amended and Restated Stockholder Voting Agreement and
Irrevocable Proxy among the Company and its stockholders.
SECTION 6.3 Deliveries to the Company. Concurrently with its
execution and delivery of this Agreement, Parent shall deliver, or
cause to be delivered, to the Company:
(a) a certificate, duly executed by the Secretary of Parent,
certifying as the Certificate of Incorporation and By-laws of Parent,
incumbency and signatures of officers of Parent and copies of
directors' resolutions approving and authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby; and
(b) an opinion of Parent's counsel, Parker Duryee Rosoff &
Haft, in form and substance reasonably satisfactory to the Company;
and
SECTION 6.4 Other Deliveries to the Company. Concurrently with
its execution and delivery of this Agreement, the Company shall
receive evidence of termination of the agreements and instruments
referred to in Section 6.2(e).
SECTION 6.5 Other Acts by the Company. Concurrently with its
execution and delivery of the Agreement, the Company shall repay such
of the interim or bridge loans previously made to the Company and
referred to in the Company Disclosure Schedule, for which repayment
requests were received prior to such execution and delivery.
ARTICLE VII
REGISTRATION OF PARENT MERGER STOCK
SECTION 7.1 Filing of Registration Statement. Parent covenants
that, within 30 calendar days following the Effective Time, it shall use its
best efforts to prepare and file with the SEC a registration statement under
the Securities Act covering resales of the Parent Merger Stock by current
Company stockholders, all in accordance with the procedures set forth in
Schedule 7.1 attached hereto and forming a part hereof. Parent agrees to be
bound by the provisions of Schedule 7.1 hereto. Parent is currently eligible
to use a registration statement on Form S-3 for the purposes set forth in
Schedule 7.1.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 By Priddy. Subject to Section 8.5 hereof, Priddy
shall indemnify, defend, and hold Parent harmless from and against any and
all losses, costs, liabilities, damages, and expenses (including legal and
other expenses incident thereto) of every kind, nature, and description,
including any undisclosed liabilities (collectively, "Losses") that result
from or arise out of (i) the breach of any representation or warranty of the
Company and of Priddy set forth in this Agreement or in any certificate or
other document delivered on behalf of the Company or Priddy to Parent
pursuant hereto; or (ii) the breach of any of the covenants of the Company or
Priddy contained in or arising out of this Agreement or the transactions
contemplated hereby.
SECTION 8.2 By Parent. Subject to Section 8.5 hereof, Parent
shall indemnify, defend, and hold the Company and Priddy harmless from and
against any and all Losses that arise out of (i) the breach of any
representation or warranty of Parent set forth in this Agreement or in any
certificate or other document delivered on behalf of the Parent to the
Company or Priddy pursuant hereto; or (ii) the breach of any of the covenants
(exclusive of Section 7.1) of Parent contained in or arising out of this
Agreement or the transactions contemplated hereby.
SECTION 8.3 Claims Procedure. Should any claim covered by
Sections 8.1 or 8.2 be asserted against a party entitled to indemnification
under this Article (the "Indemnitee"), the Indemnitee shall promptly notify
the party obligated to make indemnification (the "Indemnitor"), provided,
however, that any delay or failure in notifying the Indemnitor shall not
affect the Indemnitor's liability under this Article except to the extent
that such delay or failure was prejudicial to the Indemnitor. The Indemnitor
upon receipt of such notice shall assume the defense thereof with counsel
reasonably satisfactory to the Indemnitee and the Indemnitee shall extend
reasonable cooperation to the Indemnitor in connection with such defense.
No settlement of any such claim shall be made without the consent of the
Indemnitor and Indemnitee, such consent not to be unreasonably withheld or
delayed, nor shall any such settlement be made by the Indemnitor which does
not provide for the absolute, complete and unconditional release of the
Indemnitee from such claim. In the event that the Indemnitor shall fail,
within a reasonable time, to defend a claim, the Indemnitee shall have the
right to assume the defense thereof without prejudice to its rights to
indemnification hereunder.
SECTION 8.4 Losses Net of Tax Effect, Etc. The determination of
the amount of any Losses for which indemnification may be sought pursuant to
Sections 8.1 or 8.2 shall take into account and such amount shall be reduced
by, (i) any reduction in federal or state income taxes of the Indemnitee
attributable thereto, (ii) the amount of any insurance proceeds received by
such Indemnitee in connection therewith, and (iii) any third party payments
by virtue of indemnification or subrogation.
SECTION 8.5 Limitations on Liability. No Indemnitor shall be
liable hereunder as a result of any misrepresentation or breach of such
Indemnitor's representations, warranties or covenants contained in this
Agreement unless and until the Losses incurred by Indemnitee as a result of
such misrepresentations or breaches under this Agreement shall exceed, in the
aggregate, $100,000 (in which case the Indemnitor shall be liable for the
entire amount of such claims, including the first $100,000). In addition,
the liability of Priddy pursuant to Section 8.1 hereof shall not exceed $
[the aggregate value of the shares of Parent Common Stock received by Priddy
in the Merger, based on the closing price on the trading day prior to the
Effective Time.]
ARTICLE IX
BROKERS
SECTION 9.1 Brokers. Parent represents to the Company, and the
Company represents to Parent, that there is no broker or finder entitled to a
fee or other compensation for bringing the parties together to effect the
Merger.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Expenses. The Company and Parent shall each pay its
own expenses incident to the negotiation, preparation, and carrying out of
this Agreement, including all fees and expenses of its counsel and
accountants for all activities of such counsel and accountants undertaken
pursuant to this Agreement.
SECTION 10.2 Survival of Representations, Warranties and Covenants.
All statements contained in this Agreement or in any certificate delivered by
or on behalf of the Company, Priddy or Parent pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed
representations, warranties and covenants by the Company, Priddy or Parent,
as the case may be, hereunder. All representations, warranties, and
covenants made by the Company and Priddy and by Parent in this Agreement, or
pursuant hereto, shall survive the Effective Time only until March 1, 1997
and no action based thereon may be commenced after such date; provided,
however, that all representations and warranties related to any claim
asserted in writing prior to the expiration of the above period shall survive
until such claim shall be resolved and payment in respect thereof, if any is
owing, shall be made; and provided, further, that the representation and
warranty contained in Section 4.8 shall survive until expiration of any
applicable statute of limitations, and that the representation and warranty
contained in Section 4.10 shall survive indefinitely.
SECTION 10.3 Succession and Assignments; Third Party Beneficiaries.
This Agreement may not be assigned (either voluntarily or involuntarily) by
any party hereto without the express written consent of the other party. Any
attempted assignment in violation of this Section shall be void and
ineffective for all purposes. In the event of an assignment permitted by
this Section, this Agreement shall be binding upon the heirs, successors and
assigns of the parties hereto. Except as set forth in Section 6.5 and in
Article VII, there shall be no third party beneficiaries of this Agreement
SECTION 10.4 Notices. All notices, requests, demands, or other
communications with respect to this Agreement shall be in writing and shall
be (i) sent by facsimile transmission, (ii) sent by the United States Postal
Service, registered or certified mail, return receipt requested, or (iii)
personally delivered by a nationally recognized express overnight courier
service, charges prepaid, to the following addresses (or such other addresses
as the parties may specify from time to time in accordance with this
Section):
(a) To Parent:
Robotic Vision Systems, Inc.
425 Rabro Drive East
Hauppauge, New York 11788
Attn: President
Fax No.: (516) 273-1167
With a copy to:
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
Attn: Ira I. Roxland, Esq.
Fax No.: (212) 972-9488
(b) To the Company:
International Data Matrix, Inc.
28100 US 19N
Suite 200
Clearwater, Florida 34621-2656
Attn: President
Fax No.: (813) 725-9500
With a copy to:
Goodman Weiss Miller
100 Erieview Plaza - 27th Floor
Cleveland, Ohio 44114
Attn: Robert A. Goodman, Esq.
Fax No.: (216) 363-5835
(c) To Priddy:
c/o International Data Matrix, Inc.
28100 US 19N
Suite 200
Clearwater, Florida 34621-2656
Attn: President
Fax No.: (813) 725-9500
With a copy to:
Any such notice shall, when sent in accordance with the preceding sentence,
be deemed to have been given and received on the earliest of (i) the day
delivered to such address or sent by facsimile transmission, (ii) the fifth
business day following the date deposited with the United States Postal
Service, or (iii) 24 hours after shipment by such courier service.
SECTION 10.5 Construction. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Delaware
without giving effect to the principles of conflicts of law thereof.
SECTION 10.6 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same Agreement.
SECTION 10.7 No Implied Waiver; Remedies. No failure or delay on
the part of the parties hereto to exercise any right, power, or privilege
hereunder or under any instrument executed pursuant hereto shall operate as
a waiver nor shall any single or partial exercise of any right, power, or
privilege preclude any other or further exercise thereof or the exercise of
any other right, power, or privilege. All rights, powers, and privileges
granted herein shall be in addition to other rights and remedies to which
the parties may be entitled at law or in equity.
SECTION 10.8 Entire Agreement. This Agreement, including the
Exhibits and Disclosure Schedules attached hereto, sets forth the entire
understandings of the parties with respect to the subject matter hereof, and
it incorporates and merges any and all previous communications,
understandings, oral or written, as to the subject matter hereof, and cannot
be amended or changed except in writing, signed by the parties.
SECTION 10.9 Headings. The headings of the Sections of this
Agreement, where employed, are for the convenience of reference only and do
not form a part hereof and in no way modify, interpret or construe the
meanings of the parties.
SECTION 10.10 Severability. To the extent that any provision of
this Agreement shall be invalid or unenforceable, it shall be considered
deleted hereof and the remainder of such provision and of this Agreement
shall be unaffected and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
ROBOTIC VISION SYSTEMS, INC.
By:
Name:
Title: President
INTERNATIONAL DATA MATRIX, INC.
By:
Name:
Title: President
The undersigned agrees to be bound by the
provisions of Article IV, VIII and X hereof:
Dennis Priddy
