SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) March 13, 1995
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Allerion Inc.
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(Exact name of registrant as specified in its charter)
New Jersey
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(State or Other Jurisdiction of Incorporation)
1-8197 22-2243658
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(Commission File Number) (I.R.S. Employer Identification No.)
10 Old Bloomfield Avenue, Pine Brook, New Jersey 07058
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(Address of principal executive offices) (Zip Code)
(201) 887-1000
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(Registrant's Telephone Number, Including Area Code)
717 Ridgedale Avenue, East Hanover, New Jersey 07936
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(Former Name or Former Address, if Changed Since Last Report.)
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Item 2
In its Form 8-K dated February 17, 1995 Allerion Inc. (the "Company")
reported that an order had been entered into by the United States Bankruptcy
Court for the District of New Jersey on February 17, 1995, as amended on
February 21, 1995 (the "Order") with regard to the setting of bidding
procedures and the submission of bids for the sale of all of the Company's then
remaining operating assets as contained in the Company's Network Services
Division (the "Division"). The proceedings are recorded under case number
94-28396. Pursuant to the terms of the Order, two bids were received by the
Company by the March 8, 1995 deadline. In addition, two objections to the sale
proceedings were filed. A hearing was held before the Bankruptcy Court on March
10, 1995. At that time an auction was held among the qualified bidders,
including one party who had not submitted a bid by March 8, 1995 but had filed
one of the aforementioned objections. The successful bidder at the action
subsequently approved by the Bankruptcy Court was CompuCom Systems, Inc.
("CompuCom"). CompuCom's successful bid was for $1,000,000 in cash plus the
payment of $6,772.80 to cure defaults on two assumed contracts plus the
assumption of liabilities associated with the assumption of $54,642 in deferred
revenue. The closing of the transaction occurred on March 13, 1995. Effective
with the close of business on that day, the Company terminated all of its
remaining employees. After deductions for appropriate expenses, the balance of
the purchase price paid by CompuCom for the Division is to be shared
according to an agreement between three of the Company's secured creditors, IBM
Credit Corp., The Chase Manhattan Bank N.A. and Hewlett-Packard. The foregoing
description of the sale of the Division is subject to the terms of the Asset
Purchase Agreement which is included as an Exhibit to this Form 8-K.
Item 7. Financial Statements and Exhibits
(b) The proforma financial information required by this item 7(b)(i) is
included as an exhibut to this Form 8-K.
(c) Exhibits
Exhibit Number Description
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Exhibit 10 Asset Purchase Agreement dated March 10, 1995 by and
between Allerion, Inc. and CompuCom Systems, Inc.
Exhibit 99.1 Order of the United States Bankruptcy Court for the
District of New Jersey dated March 10, 1995 in Case No.
94-28396, approving the sale to CompuCom Systems, Inc.
Exhibit 99.2 Pro forma financial information
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLERION INC.
By:
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Dated: March 28, 1995
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EXHIBIT INDEX
Exhibit Number Description Page
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Exhibit 10 Asset Purchase Agreement dated March 10, 1995 by
and between Allerion, Inc. and CompuCom Systems,
Inc.
Exhibit 99.1 Order of the United States Bankruptcy Court for
the District of New Jersey dated March 10, 1995
in Case No. 94-28396, approving the sale to
CompuCom Systems, Inc.
Exhibit 99.2 Pro forma financial information
CRUMMY, DEL DEO, DOLAN,
GRIFFINGER & VECCHIONE
A Professional Corporation
One Riverfront Plaza
Newark, New Jersey 07102-5497
(201) 596-4500
Attorneys for Debtor and
Debtor-in-Possession
PD-9779
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW JERSEY
: Jointly Administered Under
In re: : Case No.: 94-28396
:
ALLERION INC., a corporation : Chapter 11
of the State of New Jersey, :
:
Debtor. :
:
:
:
:
In re: :
:
ULTIMATE DATA SYSTEMS, INC., a :
corporation of the State :
of Connecticut, :
: HEARING DATE: March 10, 1995
Debtor. :
:
:
ORDER (1) APPROVING ASSET PURCHASE AGREEMENT BY AND BETWEEN ALLERION,
INC. AND COMPUCOM SYSTEMS, INC. (2) AUTHORIZING, PURSUANT TO SECTION
363 OF THE BANKRUPTCY CODE, THE SALE OF THE DEBTOR'S ASSETS, AND (3)
AUTHORIZING, PURSUANT TO SECTION 365 OF THE BANKRUPTCY CODE, THE
ASSUMPTION AND ASSIGNMENT BY THE DEBTOR OF CERTAIN UNEXPIRED LEASES
AND EXECUTORY CONTRACTS, AND (4) FIXING CURE AMOUNTS ON EXECUTORY
CONTRACTS
This matter coming on to be heard on the motion of Allerion Inc.
("Allerion"), debtor and debtor-in-possession
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herein ("Debtor"), pursuant to 11 U.S.C. ss. 363 for authority to sell assets
free and clear of liens and for other relief (the "Motion") and upon the Court's
order, as amended, dated February 21, 1995 (the "Scheduling Order") fixing the
date, time and place of the hearing on the Motion (the "Hearing") and approving
the form and manner of notice thereof; due notice of the Hearing having been
given in accordance with the Scheduling Order, as evidenced by certificates of
service filed with the Clerk of this Court; the Court having reviewed the Motion
and its attachments, including without limitation, proposed forms of certain
agreements to be entered into with CompuCom Systems, Inc., including the "Asset
Purchase Agreement" introduced as an exhibit at the hearing; the Court having
heard testimony and the statements of counsel for and/or the statements of
various parties in interest, and having received other evidence, all with
respect to the Motion; the Court having considered any and all other responses
and objections to the Motion and having overruled the same; and the Court having
concluded based upon the record of the Hearing that the Motion should be
granted;
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
1. This Court has jurisdiction over this proceeding under 28 U.S.C. ss.ss.
1334 and 157(a). The Motion is a core proceeding under 28 U.S.C. ss. 157(b).
2. Due and proper notice of the Motion has been given to all parties who
are entitled to notice under the circumstances.
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3. Except as provided herein, all objections to the Motion and the entry of
this Order are overruled. The Motion is granted and approved, and the
transactions contemplated by the Asset Purchase Agreement are hereby authorized
and approved.
4. The purchase of the Acquired Assets (as defined in the Asset Purchase
Agreement) by CompuCom Systems, Inc. or its assignees or designees (separately
and collectively the "Buyer") and the sale thereof by Allerion, pursuant to this
Order and the Asset Purchase Agreement (substantially in the form entered into
evidence at the Hearing), is in good faith and is approved in all respects. The
Debtor and the Buyer have complied in all respects with the bidding procedure
set by the Court, and the sale of the Acquired Assets to the Buyer is fair and
reasonable, the purchase price is adequate in all respects, and the sale is in
the best interests of the estate. A valid business purpose exists for
authorizing sale of the Acquired Assets and assumption and assignment of the
Assumed Contracts and Assumed Leases (as defined).
5. Pursuant to sections 363(b) and (f) of the Bankruptcy Code, the Debtor
is authorized and directed to enter into the Asset Purchase Agreement, comply
with all of its obligations and consummate the transactions contemplated under
the Asset Purchase Agreement under the terms and conditions of the Asset
Purchase Agreement and transfer and convey the Acquired Assets to the Buyer at
Closing free and clear of all liens, encumbrances, claims (as "claim" is defined
in Section
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101(5) of the Bankruptcy Code), security interests, of whatever kind or
nature, mortgages, pledges, restrictions, charges, instruments, licenses,
encroachments, options, rights of recovery, judgments, orders and decrees of any
court or foreign or domestic governmental entity, interest, products, tax
(including foreign, state and local taxes), in each case of any kind or nature,
whether secured or unsecured, choate or inchoate, filed or unfiled, scheduled or
unscheduled, noticed or unnoticed, recorded or unrecorded, contingent or
non-contingent, material or non-material, known or unknown and including all
claims based on any theory that Buyer is a successor, transferee or continuation
of the Debtor or either of them (collectively "Liens" and each a "Lien"),
whether arising prior to or subsequent to the date of the filing of the Chapter
11 petition of the Debtor except for Assumed Obligations (as defined in the
Asset Purchase Agreement).
6. Any Liens that encumber or purport to encumber the Acquired Assets shall
be transferred to and attach to the proceeds of the sale under the Asset
Purchase Agreement to the same extent and with the same force, validity, status
and effect, if any, as they had against the Acquired Assets and subject to the
further order of the Court. Except as otherwise provided in the Asset Purchase
Agreement, all rights of either of the Debtor and their estates or any party in
interest to seek avoidance of or challenge the validity, force, status, extent,
and effect of Liens are hereby expressly reserved. All
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net proceeds of sale of the Acquired Assets shall be placed in escrow pending
further Orders of the Court, provided, however, Allerion may use such proceeds
to pay accrued payroll and unpaid operating expenses as of the Closing Date
which are not assumed or paid by the Buyer.
7. In the event that any Person or Entity (as those terms are defined in
the Bankruptcy Code) which has filed statements or other documents or agreements
evidencing Liens on or interests in the Acquired Assets (other than those
securing Assumed Obligations) has not delivered to the Debtor prior to the
Closing, in proper form for filing and executed by the appropriate parties,
termination statements, instruments of satisfaction, release of liens and
easements, and other documents for the purpose of documenting the release of all
Liens, or other interests which such person or entity has with respect to the
Acquired Assets, each of the Buyer and the Debtor are authorized and directed to
execute and file such statements, instruments, releases, and other documents on
behalf of the person or entity with respect to the Acquired Assets. Each such
person or entity is hereby barred from asserting any claims on such Liens or
other interests against the Buyer, its successors and assigns.
8. Upon the Closing, the Buyer shall not be deemed to (i) be the successor
of the Debtor, (ii) have, de facto or otherwise, merged with or into the Debtor,
or (iii) be a mere continuation or substantial continuation of the Debtor or the
enterprise of the Debtor.
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9. Except to the extent otherwise expressly provided in the Asset Purchase
Agreement and this Order, at the Closing, the Buyer shall not assume, nor shall
the Buyer be deemed to have assumed, any liability or obligation of the Debtor
of any kind, character or description whether known or unknown, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same is
required to be accrued on the financial statements of the holder of the
liability or obligation.
10. After the Closing, this Court shall be divested of jurisdiction of the
Acquired Assets purchased by the Buyer, except, however, the Court shall retain
jurisdiction to resolve any disputes which may arise in connection with the
Asset Purchase Agreement or this Order, and to enforce the terms of the Asset
Purchase Agreement and this Order.
11. The Debtor is authorized and directed to execute, acknowledge, and
deliver such corporate name change certificates, deeds, assignments, conveyances
and other assurances, documents, and instruments of transfer and take such other
action that may be reasonably necessary to perform the terms and provisions of
the Asset Purchase Agreement and related agreements, and shall take any other
action that may reasonably be requested by the Buyer for purposes of assigning,
transferring, granting, conveying, and confirming to the Buyer,
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or reducing to possession, any or all of the Acquired Assets and to execute such
nonmaterial amendments to the Asset Purchase Agreement as may be required to
effectuate the letter and intent of such agreements and the consummation of the
transactions authorized by this Order, all without further Order of the Court.
12. Allerion is hereby authorized and directed to assume the unexpired
leases or executory contracts identified in the Asset Purchase Agreement (the
"Assumed Leases" and "Assumed Contracts"), to pay to the other party to such
Assumed Leases or Assumed Contracts at Closing the amounts set forth on Exhibit
A hereto as Cure Amounts in full and complete satisfaction of all amounts due or
to become due to such parties to compensate such party for all actual pecuniary
loss to such party, and to assign their rights and obligations under such
Assumed Leases and Assumed Contracts to Buyer at Closing. Each of the Assumed
Leases and Assumed Contracts are valid and existing contracts or leases, each
constitutes an executory contract or unexpired lease under the Bankruptcy Code,
and the Debtor has satisfied all requirements of the Bankruptcy Code necessary
to assume and assign such contracts or leases to Buyer without the need for
consent of the non-debtor parties to such contracts or leases. As of the
Closing, any and all defaults under the Assumed Contracts and Assumed Leases
shall be and are hereby determined to be cured in all respects upon payments to
the non-debtor parties to such contracts or leases
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of the Cure Amounts. The non-debtor parties to such Assumed Contracts and
Assumed Leases shall not assert a default or make any claim against Buyer based
on any default by Debtor under such contracts or leases.
13. From and after entry of this Order, the Debtor, creditors, parties to
the Assumed Leases and Assumed Contracts, parties in interest, and each of them,
shall not take or cause to be taken any action which would interfere with the
transfer, assignment and conveyance of the Acquired Assets, the Assumed Leases
or the Assumed Contracts to the Buyer in accordance with the terms of this
Order.
14. All persons or entities who are presently, or at the Closing are, in
possession of any of the Acquired Assets are hereby directed to surrender
possession of such Acquired Assets to the Buyer at the Closing.
15. From and after the Closing, the Buyer shall have the right and
authority, subject to the terms of the Asset Purchase Agreement, to collect for
the account of the Buyer any sums which shall be due and payable on account of
any of the Acquired Assets transferred or intended to be transferred to the
Buyer at the Closing and to endorse with the name of Allerion any checks or
drafts relating to the Acquired Assets which may be payable to the order of
Allerion; provided, however, that the disposition of any such sums and any such
checks shall be in accordance with the terms of the Asset Purchase Agreement.
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16. As of the Closing, all agreements of any kind whatsoever and all orders
of this Court entered in this case prior to the date hereof shall be deemed
amended and/or vacated to the extent required to permit the consummation of the
transactions under the Asset Purchase Agreement. To the extent such other
agreements or orders are inconsistent with this Order or the Asset Purchase
Agreement, this Order and the Asset Purchase Agreement shall in all such cases
govern.
17. Neither the Buyer nor any secured creditor shall be liable for any
transferee tax liability that arises or may arise by operation of law from the
transfers and conveyances effected or authorized hereby, except to the extent
any such liability constitutes an Assumed Obligation. The Debtor may execute and
deliver whatever lawful agreements that are reasonably necessary and make
whatever lawful arrangements that are reasonably required to assure the transfer
and conveyance of the Acquired Assets free and clear of any claims by any
governmental unit for taxes incurred as a consequence of the sale of any of the
Acquired Assets under the terms of the Asset Purchase Agreement or to relieve
the Buyer and any secured creditor of any claim for transferee liability with
respect to such taxes.
18. Pursuant to section 365(f) of the Bankruptcy Code, conditioned upon the
Closing, all rights and obligations under the Assumed Leases and Assumed
Contracts to the extent included in the Acquired Assets and identified in the
Asset
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Purchase Agreement, and set forth on Exhibit A hereto, shall be assumed by
Allerion and assigned to the Buyer, without the execution of any further
documents or instruments. Upon the Closing, Allerion shall have no further
obligations under such Assumed Leases or Assumed Contracts set forth on Exhibit
A pursuant to section 365(k) of the Bankruptcy Code.
19. The provisions of this Order authorizing the Debtor to enter into the
Asset Purchase Agreement, and authorizing and directing the transactions
contemplated by said agreement shall be self-executing and neither the Debtor
nor the Buyer shall be required to execute or file any releases, termination
statements, assignments, consents, or other instruments in order to effectuate
consummation of said agreement or to implement the foregoing provisions hereof
except as provided in said agreement or in this Order. Notwithstanding the
foregoing, the Debtor, the Buyer and all other parties are authorized and
directed to take any and all actions necessary and appropriate to effectuate,
consummate, and implement fully the transactions contemplated by said agreement
and this Order.
20. The Buyer is a purchaser in good faith of the Acquired Assets and is
entitled to the protections afforded by section 363(m) of the Bankruptcy Code,
and is an assignee in good faith of the Assumed Leases and Assumed Contracts.
21. This Order is binding upon and inures to the benefit of any successors
or assigns of the Debtor or the
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Buyer, including any trustee appointed in this case or any subsequent case of
the Debtor under chapter 7 of the Bankruptcy Code. No provision of this Order
shall be modified, amended, revoked or terminated, whether under any plan of
reorganization or otherwise, if such modification, amendment, revocation or
termination is sought by any party receiving notice of the Motion.
22. This Order is a final, appealable order.
DATED: March 16th, 1995
/S/ WILLIAM F. TUOHEY
-------------------------------
HONORABLE WILLIAM F. TUOHEY
United States Bankruptcy Judge
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") entered into this 10th day
of March, 1995, by and between ALLERION, INC., a New Jersey corporation with its
principal place of business at 10 Bloomfield Avenue, Montville, New Jersey 07045
(hereinafter called "Seller") and CompuCom Systems, Inc., a Delaware corporation
with its principal place of business located at 10100 North Central Expressway,
Dallas, Texas 75231 (hereinafter called "Buyer").
WHEREAS, Seller's Network Services Division (the "Division") is engaged in
the business of providing consulting and other services in connection with
computer hardware and software products (the "Business"); and
WHEREAS, on December 7, 1994, Seller commenced Case No. 94-28396 (WFT) (the
"Proceeding") under chapter 11, title 11 of the United States Code, 11 U.S.C.
ss.ss. 101, et seq. (the "Bankruptcy Code"), in the United States Bankruptcy
Court for the District of New Jersey (the "Bankruptcy Court"); and
WHEREAS, on February 21, 1995, the Bankruptcy Court entered an amended
order (i) approving bidding procedures, (ii) setting a hearing to approve a sale
of assets and assignment of unexpired leases and executory contracts and
establishment of cure amounts and adequate assurance terms, and (iii) setting
dates for filing of bids and objections, with respect to the transaction
contemplated herein; and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller, all right, title and interest of Seller in and to substantially all of
the assets and properties owned by Seller to the extent used in the Division's
Business, subject to certain exceptions set forth in Section 1.2 hereof, all
upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the Buyer and the Seller agree as follows:
1. PURCHASE AND SALE
1.1. Acquired Assets.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing referred to in Section 4.1 hereof, Seller shall sell,
assign, transfer, convey and
<PAGE>
deliver to Buyer, and Buyer shall purchase, acquire and take assignment and
delivery of, all the right, title and interest of Seller in and to all of the
Division's assets, properties, goodwill and business of every kind and
description, wherever located (such assets to be purchased by Buyer being
referred to as the "Acquired Assets"). The Acquired Assets shall only include
those assets set forth on Schedule A hereto, as amended, and described below to
the extent used in connection with the Division's Business:
(i) all of the fixed assets used in connection with the Business
(collectively, the "Fixed Assets"), including, without limitation,
machinery, equipment, furniture, fixtures, leasehold improvements, office
furnishings and other equipment of Seller used in connection with the
Business wherever located;
(ii) all tradenames, tradename rights, trademarks, trademark rights,
logos, tradedress, licenses, patents, patent applications, patent rights,
inventions (whether or not patentable), trade secrets, customer lists,
copyrights (including registrations and applications therefor), technology,
computer software source codes, know-how, processes, projects in
development, service marks, computer software, computer software
modifications, enhancements and computer software derivative works, other
intellectual property rights and other proprietary information of Seller
(collectively, the "Intellectual Property"), if any, to the extent used in
connection with the Business;
(iii) all inventory held for resale in connection with, or used to
operate, the Business, finished goods, raw materials, packaging, supplies
and personal property and any prepaid deposits for any of the same
(collectively, the "Inventory") wherever located and on hand on the Closing
Date;
(iv) all Seller's accounts receivable and notes receivable relating to
the Business outstanding as of the Closing Date (the "Receivables");
(v) all of Seller's contract rights with respect to the Acquired
Assets and the Assumed Obligations (as defined in Section 3.1 hereof);
(vi) all books and records, computer software documentation, computer
software source codes, computer software modifications and enhancements,
computer software derivative works, correspondence,
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customer lists, computer software and programs (subject to the rights of
third party licensors) and all advertising, packaging and promotional
materials and files relating to the Business;
(vii) all goodwill, other intangible property and causes of action
relating to the Acquired Assets or the Business;
(viii) all licenses, certificates, permits and telephone numbers
relating to the Business to the extent the same are transferable;
(ix) the Assumed Leases and Assumed Contracts (as defined below) of
Seller set forth on Schedule B attached hereto, as amended; and
(x) all Seller's right, title and interest in, to and under all other
assets, rights and claims of every kind and nature used or intended to be
used in the operation of, or residing with, the Business.
(b) All of the Acquired Assets shall be sold, assigned, transferred,
conveyed and delivered to Buyer free and clear of all liens, encumbrances,
claims (as "claim" is defined in section 101(5) of the Bankruptcy Code),
security interests, of whatever kind or nature, mortgages, pledges,
restrictions, charges, instruments, licenses, encroachments, options, rights of
recovery, judgments, orders and decrees of any court or foreign or domestic
governmental entity, interest, products, tax (including foreign, state and local
taxes), in each case of any kind or nature, whether secured or unsecured, choate
or inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed,
recorded or unrecorded, contingent or non-contingent, material or non-material,
known or unknown and including all claims based on any theory that Buyer is a
successor, transferee or continuation of Seller or the Business (collectively
"Liens" and each a "Lien"), whether arising prior to or subsequent to the date
of the filing of the Chapter 11 petition of Seller, in accordance with sections
363(f) and 365 of the Bankruptcy Code.
1.2. Excluded Assets. Notwithstanding the foregoing, Seller is not selling,
assigning, transferring, conveying or delivering, and Buyer is not purchasing
pursuant to this Agreement, any asset of Seller not included on Schedule A or
described in Section 1.1(a) hereto (the "Excluded Assets").
1.3. Executory Contracts. At the closing, Buyer shall reimburse Seller for
all amounts owed under ("Cure Amounts"),
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and Seller shall have assumed in accordance with the applicable provisions of
the Bankruptcy Code, all of the executory leases, contracts and licenses with
those parties listed on Schedule B attached hereto (the "Assumed Leases and
Assumed Contracts"). Buyer shall be entitled to negotiate a reduction in the
Cure Amounts prior to the Closing; provided, that attainment of any such
reduction shall not be a condition to Closing.
2. PURCHASE PRICE
2.1. Amount. The purchase price for the Acquired Assets (the "Purchase
Price") shall be the sum of the following:
(i) the Cure Amounts (as defined in Section 1.3 hereof) for all
Assumed Leases and Assumed Contracts; and
(ii) the face amount of Deferred Revenue, as set forth on the January
31, 1995 Balance Sheet of the Division attached hereto as Schedule A
("Deferred Revenue"), related to future service obligations of the Seller,
which will be assumed by Buyer; and
(iii) the sum of one million dollars ($1,000,000) in cash; and
(iv) cash not in excess of $10.00 for the cost to Seller of continued
maintenance and operation of the Business from March 8, 1995 to the
Closing, calculated as operating loss, if any, in accordance with generally
accepted accounting principles, as set forth in Section 2.4(b)(ii) hereof,
with the amount thereof to be determined by the parties at Closing.
2.2. Payment of Purchase Price. The Purchase Price shall be paid by Buyer
to Seller and Seller's chapter 11 estate as follows:
(i) an amount equal to the portion of the Purchase Price described in
Section 2.1(i) sufficient to pay all amounts due under Assumed Leases and
Assumed Contracts at Closing which shall be deposited to an escrow account
established for that purpose and used by Seller to pay Cure Amounts;
(ii) the balance of the Purchase Price shall be paid to the Seller by
the Buyer in cash at Closing; and
(iii) Deferred Revenue obligations shall be assumed by Buyer.
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2.3. Deposit by Buyer. Contemporaneously with its execution of this
Agreement, Buyer shall have deposited the amount of $100,000.00 (the "Purchase
Deposit") into an escrow account established for purposes of this Section 2.3.
Except as provided in Section 9.2, this deposit shall be nonrefundable to Buyer
and shall be paid to Seller and Seller's chapter 11 estate upon Closing or
termination of this Agreement as provided in Section 9.1 or otherwise.
2.4. Purchase Price Adjustment.
(a) The transaction described in this Agreement is based on the asset
amounts, the liabilities assumed and the Deferred Revenue (representing service
obligations assumed). To the extent that trade accounts receivable (as
determined in accordance with generally accepted accounting principles),
increase or decrease from March 9, 1995 to Closing, such increase or decrease
shall be added to or subtracted from the Purchase Price. No adjustment to the
Purchase Price will be made for any changes in other Receivables, prepaid
expenses, other current assets, net property, plant and equipment, net
intangible assets or other non-current assets.
(b) Seller and Buyer agree that an adjustment to the Purchase Price will be
made at Closing (i) by increasing the Purchase Price for any new assets acquired
by Seller for cash after January 31, 1995 with the consent of Buyer, and (ii) by
either a reduction for accounting gains and an increase for an accounting loss
for the period from January 31, 1995 to Closing, after excluding depreciation
and bad debt expense.
3. ASSUMPTION OF CONTRACTS AND LIABILITIES
3.1. Assumption. At the Closing, as further consideration for the sale and
transfer of the Acquired Assets, Buyer shall assume and agree to pay, perform,
fulfill and discharge, and shall indemnify and hold Seller harmless from and
against the following specified liabilities and obligations of Seller: (i) the
Assumed Leases and Assumed Contracts as on amended Schedule B; (ii) the purchase
orders of Seller for the purchase of Inventory to be delivered on and after the
Closing Date; (iii) reimbursable expenses of employees of Seller which relate to
services rendered to Seller and which were incurred during the period from
January 31, 1995 to Closing, but only to the extent such expenses relate to
accounts which are billed after the Closing (provided, that Buyer's obligation
under this clause (iii) shall not exceed $5,000 in the aggregate) (the
liabilities and obligations specified in clauses (i), (ii) and (iii)
collectively being the "Assumed Obligations"); and (iv) Seller's service
obligations designated as Deferred Revenue.
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3.2. No Other Liabilities. It is expressly agreed and understood that,
except as provided in Section 3.1 hereof, Buyer is assuming no liability or
obligation of Seller of any kind or nature whatsoever, whether accrued or
unaccrued, contingent or non-contingent, material or non-material, or known or
unknown as of the Closing Date, including, without limitation, any liability or
obligation (i) for taxes (including, without limitation, sales or transfer
taxes) now or hereafter owed by Seller or any affiliate of Seller, or
attributable to the Acquired Assets or the Business, relating to any period, or
any portion of any period, ending on or prior to the Closing Date or to the sale
of the Acquired Assets to Buyer and (ii) relating to or arising out of the
Excluded Assets. The transfer of the Acquired Assets pursuant to this Agreement
shall be free and clear of all Liens, whether arising prior to or subsequent to
the date of the filing of the Chapter 11 petition of Seller.
4. CLOSING
4.1. Time and Place. The closing of the sale of the Acquired Assets (the
"Closing") shall be held at the offices of Crummy, Del Deo, Dolan, Griffinger &
Vecchione, One Riverfront Plaza, Newark, New Jersey 07102-5497 and shall occur
on the first business day after the entry of an order by the Bankruptcy Court
substantially in the form of Schedule C hereto approving the sale and including
a finding that Buyer is a good faith purchaser under section 363(m) of the
Bankruptcy Code (the "Approval Order"), but in no event later than March 13,
1995. The date on which the Closing is actually held hereunder is referred to
herein as the "Closing Date."
4.2. Conduct of Business Prior to Closing. Prior to the Closing, Seller
shall continue to operate the Business only in the ordinary and usual course and
consistent with Seller's past practices. Without limiting the generality of the
foregoing, Seller shall use all commercially reasonable efforts and diligence
(i) to preserve the business operations of Seller and the Business intact, (ii)
to keep available the services of its current personnel, (iii) to preserve in
full force and effect and to perform the contracts, agreements, instruments,
leases, licenses, arrangements and understandings of Seller, (iv) to preserve
the goodwill of its suppliers, customers, community and others having relations
with Seller, (v) to continue in full force and effect all binders and policies
of insurance of Seller and (vi) to continue its advertising and promotional
activities, and pricing and purchasing policies, in accordance with past
practices.
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<PAGE>
4.3. Transactions at Closing. At the Closing:
(a) Seller shall duly execute and deliver to Buyer a bill of sale and
assignment (the "Bill of Sale and Assignment") and such other certificates of
title and other instruments of assignment or transfer with respect to the
Acquired Assets as Buyer may reasonably request and as may be necessary to vest
in Buyer all of Seller's right, title and interest in and to the Acquired Assets
free and clear of all Liens (other than any Liens comprising or existing under,
or in respect of, the Assumed Obligations, but only to the extent of such
Assumed Obligations).
(b) Buyer shall deliver the Purchase Price to Seller and Seller's chapter
11 estate as provided in Section 2.2 hereof to be distributed only pursuant to
orders entered by the Bankruptcy Court.
(c) Buyer and Seller shall duly execute or deliver such certificates and
documents (including, without limitation, officer's and secretary's certificates
and certificates of good standing) and third party consents as may be required
to effectuate the transactions contemplated by this Agreement or as may be
reasonably requested by Buyer or Seller, as the case may be.
5. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
5.1. Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of New Jersey.
Seller has all requisite power and authority to own and hold the Acquired Assets
owned or held by it, to conduct the Business as currently conducted by Seller,
and is duly licensed or qualified to do business in each jurisdiction in which
the operation of the Business makes such licensing or qualification necessary.
5.2. Authority. Subject to and after giving effect to the Approval Order
and compliance with applicable requirements of the Bankruptcy Code, (a) Seller
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby; (b) Seller has
obtained all (if any) necessary corporate approvals for the execution and
delivery of this Agreement and the consummation of the transaction contemplated
hereby; and (c) this Agreement has been duly executed and delivered by Seller
and (assuming due authorization, execution and delivery by Buyer) constitutes
Seller's legal, valid and binding obligation, enforceable against it in
accordance with its terms.
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<PAGE>
5.3. Non-Contravention. Neither the execution and delivery of this
Agreement by Seller nor the consummation by Seller of the transactions
contemplated hereby will constitute a violation of, or be in conflict with,
constitute or create a default under, or result in the creation or imposition of
any Liens upon any property of Seller pursuant to (a) its Certificate of
Incorporation and By-laws; (b) any agreement or commitment to which Seller is a
party or by which Seller or any of its properties are bound, or to which Seller
is subject; or (c) any law or statute or any judgment, decree, order, regulation
or rule of any court or governmental or regulatory authority relating to Seller.
5.4. Governmental Consents. There are no consents, approvals or
authorizations of, or registrations, qualifications or filings with,
governmental or regulatory agencies or authorities necessary in connection with
the execution and delivery of this Agreement by the Seller or for the
consummation by the Seller of the transactions contemplated hereby.
5.5 Compliance with Laws. Seller has conducted and continues to conduct the
Business in accordance with all laws and statutes and rules, regulations,
judgments, orders or decrees of any court or governmental or regulatory
authority applicable to Seller or any of its properties or assets, including,
without limitation, the Acquired Assets, or the Business, and Seller is not in
violation of any such laws, statutes, rules, regulations, judgments, orders or
decrees, except to the extent that Seller may have failed to timely make certain
payments called for by the Bankruptcy Code.
5.6. Litigation, Etc. There are no undisclosed actions, suits, proceedings
or investigations pending or threatened, relating to or affecting the Acquired
Assets, or the Business, or which question the validity of this Agreement or
challenge any of the transactions contemplated hereby or the use of the Acquired
Assets or the conduct of the Business after the Closing by Buyer.
5.7. Ownership and Transfer of Acquired Assets. Seller owns, and shall have
the unrestricted right to transfer and assign to Buyer at the Closing, all
right, title and interest to the Acquired Assets free and clear of all Liens,
whether arising prior to or subsequent to the date of the filing of the Chapter
11 petition of Seller.
5.8 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by
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<PAGE>
this Agreement based upon arrangements made by or on behalf of Seller.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
6.1. Organization and Standing of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite power and authority under its charter and
governance documents and under applicable laws to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
6.2. Corporate Approval; Binding Effect. Buyer has obtained all necessary
corporate authorizations and approvals required for the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Buyer (assuming due
execution and delivery by Seller) and constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
6.3. Financial Feasibility. Buyer has sufficient funds available to pay
Seller the Purchase Price for the Acquired Assets at the Closing and in
accordance with the terms of this Agreement, and will demonstrate at the hearing
to approve the transaction described herein that it has the financial
wherewithal and ability to pay all Cure Amounts and provide adequate assurance
of future performance under all Assumed Leases and Assumed Contracts.
6.4. Non-Contravention. Neither the execution and delivery of this
Agreement by Buyer nor the consummation by Buyer of the transactions
contemplated hereby will constitute a violation of, or be in conflict with,
constitute or create a default under, or result in the creation or imposition of
any liens or encumbrances upon any property of Buyer pursuant to (a) its
Certificate of Incorporation and By-laws; (b) any agreement or commitment to
which Buyer is a party or by which Buyer or any of its properties are bound, or
to which Buyer is subject; or (c) any law or statute or any judgment, decree,
order, regulation or rule of any court or governmental or regulatory authority
relating to Buyer.
6.5. Governmental Consents. There are no consents, approvals or
authorizations of, or registrations, qualifications or filings with,
governmental or regulatory agencies or authorities necessary in connection with
the execution and delivery of this Agreement by the Buyer or for
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<PAGE>
the consummation by the Buyer of the transactions contemplated hereby.
6.6. Litigation, Etc. There are no actions, suits, proceedings or
investigations pending or threatened against Buyer which question the validity
of this Agreement or challenge any of the transactions contemplated hereby.
6.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer, except that Buyer has utilized a finder who is entitled to a
finder's fee in connection herewith, and this finders fee is an obligation
solely of Buyer.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the Closing shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions (to
the extent noncompliance is not waived in writing by Buyer in Buyer's sole and
absolute discretion), unless the failure of any such condition to be satisfied
shall be the fault of Buyer:
7.1. Representations and Warranties True at Closing.
The representations and warranties made by Seller in or pursuant to this
Agreement shall be true and correct in all material respects at and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given at and as of the Closing Date (except for (i) any
representations and warranties made as of a specific date, which representations
and warranties shall have been true as of such specific date, and (ii) any
changes contemplated by this Agreement).
7.2. Compliance with Agreement. Seller shall have performed and complied in
all material respects with all of its obligations under this Agreement to be
performed or complied with on or prior to the Closing Date.
7.3. Compliance with the Law; No Restraining Order.
No litigation shall be pending which purports to restrain or prevent the
transactions contemplated by this Agreement and Seller and Buyer shall have
complied with all applicable requirements of statutes and governmental orders,
regulations and rules relating to the transactions contemplated by this
Agreement and the Closing hereunder.
7.4. Bankruptcy Court Approval. The Bankruptcy Court shall have entered the
Approval Order.
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<PAGE>
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the Closing shall be subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(to the extent noncompliance is not waived in writing by Seller in Seller's sole
and absolute discretion), unless the failure of any such condition to be
satisfied shall be the fault of Seller:
8.1. Representations and Warranties True at Closing.
The representations and warranties made by Buyer in this Agreement shall be
true in all material respects at and as of the Closing Date with the same effect
as though made or given at and as of the Closing Date (except for (i) any
representations and warranties made as of a specific date, which representations
and warranties shall have been true as of such specific date, and (ii) any
changes contemplated by this Agreement).
8.2. Compliance with Agreement. Buyer shall have performed and complied in
all material respects with all of its obligations under this Agreement to be
performed or complied with at or prior to the Closing Date.
8.3. Compliance with the Law; No Restraining Order.
No litigation shall be pending which purports to restrain or prevent the
transactions contemplated by this Agreement and Seller and Buyer shall have
complied with all applicable requirements of statutes and governmental orders,
regulations and rules relating to the transactions contemplated by this
Agreement and the Closing hereunder.
8.4. Bankruptcy Court Approval. The Bankruptcy Court shall have entered the
Approval Order.
9. TERMINATION
9.1. Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer or Seller, if, without fault of the party seeking termination,
the Closing shall not have occurred on or before March 20, 1995;
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<PAGE>
(c) by Buyer or Seller if, through no fault of the party desiring to
exercise this termination provision, any court of competent jurisdiction in the
United States or any other United States governmental body shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order,
decree, ruling or other action shall have become final and non-appealable;
(d) by Buyer or Seller, if the other party shall have breached the
representations and warranties set forth in Sections 5 or 6 hereof or otherwise
fails to perform any of its covenants and agreements in this Agreement.
9.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1(a), (b), or (c) hereof, (i) this Agreement
shall forthwith become null and void and have no further force and effect, (ii)
Buyer shall be entitled to a return of the Purchase Deposit and (iii) none of
the parties hereto nor any of their respective directors, officers,
shareholders, affiliates, representatives or advisors shall have any further
obligation or liability under the provisions of this Agreement. In the event of
termination by Seller pursuant to Section 9.1(d) hereof, Seller shall retain the
Purchase Deposit as Seller's liquidated damages. In the event of termination by
Buyer pursuant to Section 9.1(d) hereof, Buyer shall be entitled to a return of
the Purchase Deposit and, in addition, Seller shall reimburse Buyer for all of
Buyer's reasonable and documented costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors, financing
sources and accountants, incurred by Buyer in connection with the preparation,
negotiation and performance of Buyer's bid submission to the Bankruptcy Court,
this Agreement and the transactions contemplated hereby, up to an amount equal
to $100,000, subject to notice and a hearing before the Bankruptcy Court.
10. GENERAL
10.1. Expenses. All expenses of the preparation, execution and consummation
of this Agreement and of the transactions contemplated hereby including, without
limitation, attorneys', accountants' and outside advisors' fees and
disbursements, shall be borne by the party incurring such expenses.
10.2. Best Efforts. For purposes of this Agreement, the term "best efforts"
shall mean promptly and in good faith taking all actions which are reasonable,
necessary and appropriate to accomplish the objective requiring the use of best
efforts, but shall not include any obligation (i) to make
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<PAGE>
any payment, incur any costs, commit available resources, or forego the receipt
of any payment, which is material in amount in light of the required objective,
(ii) to initiate any lawsuit to achieve the required objective, or (iii) to take
any action which is unlawful. Seller shall use best efforts to obtain all
authorizations, consents, orders and approvals that may be or become necessary
for its execution and delivery of, and the performance of its obligations
pursuant to, this Agreement and will cooperate fully with Buyer in promptly
seeking to obtain all such authorizations, consents, orders and approvals.
10.3. Allocation of Purchase Price and Assumed Obligations. The parties
hereto shall reach agreement by March 31, 1995 as to the allocation of the sum
of the Purchase Price and the Assumed Obligations among the Acquired Assets as
of the Closing Date. Any subsequent adjustments to the sum of the Purchase Price
and the Assumed Obligations shall be reflected in the allocation hereunder in a
manner consistent with section 1.1060-1T(f) of the Treasury Regulations
promulgated by the United States Department of the Treasury (the "Regulations")
with respect to the Internal Revenue Code of 1986, as amended (the "Code"). For
all tax purposes, Buyer and Seller agree to report the transactions contemplated
in this Agreement in a manner consistent with the terms of this Agreement,
including the allocation contemplated by this Section 10.3, and that none of
them will take any position inconsistent therewith in any tax return, in any
refund claim, in any litigation or otherwise.
10.4. Access. (a) From the date hereof until the Closing, upon reasonable
notice, Seller shall and shall cause its officers, directors, employees, agents
and counsel to: (i) afford the officers, employees, and authorized agents,
accountants, counsel and financing sources and representatives of Buyer
reasonable access, during normal business hours, to the offices, properties,
other facilities, books and records of Seller and to those officers, directors,
employees, agents, accountants and counsel of Seller who have knowledge relating
to Seller and the Business and (ii) furnish to the officers, employees and
authorized agents, accountants, counsel, financing sources and representatives
of Buyer such additional financial and operating data and other information
regarding the Business and the Acquired Assets as Buyer from time to time may
reasonably request.
(b) In order to facilitate the resolution of any claims or causes of
actions made or to be made against, by or incurred by Seller, Seller's chapter
11 estate, and/or the creditors committees thereof, for a period of three years
after Closing, Buyer shall (i) retain the books and records of Seller which are
transferred to Buyer pursuant to this Agreement
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<PAGE>
relating to periods prior to the Closing in a manner reasonably consistent with
the prior practices of Seller and (ii) upon reasonable notice, afford the
officers, employees and authorized agents and representatives of Seller and the
creditors committees of Seller's chapter 11 estates reasonable access (including
the right to make, at Seller's expense, photocopies), during normal business
hours, to such books and records.
(c) In order to facilitate the resolution of any claims made by or against
or incurred by Buyer, for a period of three years after Closing, Seller shall
(i) retain the books and records of Seller which are not transferred to Buyer
pursuant to this Agreement relating to periods prior to the Closing in a manner
reasonably consistent with the prior practices of Seller and (ii) upon
reasonable notice, afford the officers, employees and authorized agents and
representatives of Buyer reasonable access (including the right to make, at
Buyer's expense, photocopies), during normal business hours, to such books and
records.
10.5. Collection of Receivables. Seller hereby covenants and agrees that in
the event any payment for a Receivable is delivered to Seller or any affiliate
of Seller after Closing, Seller shall, or shall cause its affiliate to,
promptly, and in any event within ten days, deliver such payment to Buyer.
10.6. Notices. All notices, demands or other communications hereunder shall
be in writing or by written telecommunication, and shall be deemed to have been
duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid, or sent by written facsimile transmission,
as follows:
If to Seller, to:
Allerion, Inc.
10 Bloomfield Avenue
Montville, NJ 07045
Attention: Michael J. O'Donnell
Telecopy: (201) 882-7803
With a copy sent contemporaneously to:
Paul R. DeFilippo, Esq.
Crummy, Del Deo, Dolan,
Griffinger & Vecchione
One Riverfront Plaza
Newark, NJ 07102-5497
Telecopy: (201) 596-0545
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<PAGE>
If to Buyer, to:
CompuCom Systems, Inc.
10100 North Cental Expressway
Dallas, Texas 75231
Attention: Chief Financial Officer
Telecopy: (214) 265-5275
With a copy sent contemporaneously to:
Alice G. Burt
Senior Corporate Counsel
Safeguard Scientifics, Inc.
800 The Safeguard Building
435 Devon Park Drive
Wayne, Pennsylvania 19087
Telecopy: (610) 293-0601
10.7. Entire Agreement. This Agreement contains the entire understanding of
the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof and shall not be amended except by a written
instrument hereafter signed by all of the parties hereto. The Schedules referred
to in this Agreement are incorporated into this Agreement for all purposes.
10.8. Governing Law. The validity and construction of this Agreement shall
be governed by the internal laws (and not the principles of conflict of laws) of
the State of New Jersey. The parties consent to the jurisdiction of the
Bankruptcy Court to resolve any and all disputes under this Agreement.
10.9. Headings. The headings of Sections and subsections are for reference
only and shall not limit or control the meaning thereof.
10.10. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement, nor the obligations of any party hereunder,
shall be assignable or transferable by any such party without the prior written
consent of the other party hereto; provided, however, Buyer shall have the right
to assign its rights and obligations hereunder without the prior written consent
of Seller, provided that Buyer remains liable hereunder as if no assignment
occurred.
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<PAGE>
10.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12. Survival. Buyer's agreements herein to indemnify Seller shall
survive Closing and each of Buyer's and Seller's obligations under Section 9.2
shall survive termination of this Agreement.
10.13. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms of this Agreement and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity without the necessity of demonstration of
inadequacy of monetary damages.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered by their
respective duly authorized officers as of the date and year first above written.
ALLERION, INC.
By: /s/ Michael J. O'Donnell
----------------------------
Name: Michael J. O'Donnell
Title: President
COMPUCOM SYSTEMS, INC.
By: /s/ R. Boutin
----------------------------
Name: R. Boutin
Title: Sr. Vice President/
Chief Financial Officer
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<PAGE>
SCHEDULE A
Allerion, Inc.
Net Balance Sheet
January 31, 1995
Accounts Receivable........................ $1,610,050
Inventory.................................. 75,333
Prepaid Rent............................... 22,413
Security Deposit........................... 65,000
Net Machinery & Equipment.................. 1,783,836
Intangibles - Networks .................... 101,439
Other Long-term Assets .................... 13,200
Deferred Revenue .......................... (72,970)
----------
$3,598,302
<PAGE>
SCHEDULE B
ASSUMED EXECUTORY CONTRACTS AND LEASES
Xerox Corporation Maintenance Agreement
CT CAC/Central NJ Copy Machine Model 5052
P.O. Box 4903 Serial Number: 15P-367564
Stamford, CT 06907
Pitney Bowes Credit Equipment Lease
P.O. Box 85460 Postage Machine
Louisville, KY 40285-5460
<PAGE>
SCHEDULE C
CRUMMY, DEL DEO, DOLAN,
GRIFFINGER & VECCHIONE
A Professional Corporation
One Riverfront Plaza
Newark, New Jersey 07102-5497
(201) 596-4500
Attorneys for Debtor and
Debtor-in-Possession
PD-9779
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW JERSEY
: Jointly Administered Under
In re: : Case No.: 94-28396
:
ALLERION INC., a corporation : Chapter 11
of the State of New Jersey, :
:
Debtor. :
:
:
:
:
In re: :
:
ULTIMATE DATA SYSTEMS, INC., a :
corporation of the State :
of Connecticut, :
: HEARING DATE: March 10, 1995
Debtor. :
:
:
ORDER (1) APPROVING ASSET PURCHASE AGREEMENT BY AND BETWEEN ALLERION,
INC. AND COMPUCOM SYSTEMS, INC. (2) AUTHORIZING, PURSUANT TO SECTION 363
OF THE BANKRUPTCY CODE, THE SALE OF THE DEBTOR'S ASSETS, AND (3)
AUTHORIZING, PURSUANT TO SECTION 365 OF THE BANKRUPTCY CODE, THE
ASSUMPTION AND ASSIGNMENT BY THE DEBTOR OF CERTAIN UNEXPIRED LEASES AND
EXECUTORY CONTRACTS, AND (4) FIXING CURE AMOUNTS ON EXECUTORY CONTRACTS
This matter coming on to be heard on the motion of Allerion Inc.
("Allerion"), debtor and debtor-in-possession
<PAGE>
herein ("Debtor"), pursuant to 11 U.S.C. ss. 363 for authority to sell assets
free and clear of liens and for other relief (the "Motion") and upon the Court's
order, as amended, dated February 21, 1995 (the "Scheduling Order") fixing the
date, time and place of the hearing on the Motion (the "Hearing") and approving
the form and manner of notice thereof; due notice of the Hearing having been
given in accordance with the Scheduling Order, as evidenced by certificates of
service filed with the Clerk of this Court; the Court having reviewed the Motion
and its attachments, including without limitation, proposed forms of certain
agreements to be entered into with Compucom Systems, Inc., including the "Asset
Purchase Agreement" introduced as an exhibit at the hearing; the Court having
heard testimony and the statements of counsel for and/or the statements of
various parties in interest, and having received other evidence, all with
respect to the Motion; the Court having considered any and all other responses
and objections to the Motion and having overruled the same; and the Court having
concluded based upon the record of the Hearing that the Motion should be
granted;
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
1. This Court has jurisdiction over this proceeding under 28 U.S.C. ss.ss.
1334 and 157(a). The Motion is a core proceeding under 28 U.S.C. ss. 157(b).
2. Due and proper notice of the Motion has been given to all parties who
are entitled to notice under the circumstances.
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3. Except as provided herein, all objections to the Motion and the entry of
this Order are overruled. The Motion is granted and approved, and the
transactions contemplated by the Asset Purchase Agreement are hereby authorized
and approved.
4. The purchase of the Acquired Assets (as defined in the Asset Purchase
Agreement) by Compucom Systems, Inc. or its assignees or designees (separately
and collectively the "Buyer") and the sale thereof by Allerion, pursuant to this
Order and the Asset Purchase Agreement (substantially in the form entered into
evidence at the Hearing), is in good faith and is approved in all respects. The
Debtor and the Buyer have complied in all respects with the bidding procedure
set by the Court, and the sale of the Acquired Assets to the Buyer is fair and
reasonable, the purchase price is adequate in all respects, and the sale is in
the best interests of the estate. A valid business purpose exists for
authorizing sale of the Acquired Assets and assumption and assignment of the
Assumed Contracts and Assumed Leases (as defined).
5. Pursuant to sections 363(b) and (f) of the Bankruptcy Code, the Debtor
is authorized and directed to enter into the Asset Purchase Agreement, comply
with all of its obligations and consummate the transactions contemplated under
the Asset Purchase Agreement under the terms and conditions of the Asset
Purchase Agreement and transfer and convey the Acquired Assets to the Buyer at
Closing free and clear of all liens, encumbrances, claims (as "claim" is defined
in Section
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101(5) of the Bankruptcy Code), security interests, of whatever kind or nature,
mortgages, pledges, restrictions, charges, instruments, licenses, encroachments,
options, rights of recovery, judgments, orders and decrees of any court or
foreign or domestic governmental entity, interest, products, tax (including
foreign, state and local taxes), in each case of any kind or nature, whether
secured or unsecured, choate or inchoate, filed or unfiled, scheduled or
unscheduled, noticed or unnoticed, recorded or unrecorded, contingent or
non-contingent, material or non-material, known or unknown and including all
claims based on any theory that Buyer is a successor, transferee or continuation
of the Debtor or either of them (collectively "Liens" and each a "Lien"),
whether arising prior to or subsequent to the date of the filing of the Chapter
11 petition of the Debtor except for Assumed Obligations (as defined in the
Asset Purchase Agreement).
6. Any Liens that encumber or purport to encumber the Acquired Assets shall
be transferred to and attach to the proceeds of the sale under the Asset
Purchase Agreement to the same extent and with the same force, validity, status
and effect, if any, as they had against the Acquired Assets and subject to the
further order of the Court. Except as otherwise provided in the Asset Purchase
Agreement, all rights of either of the Debtor and their estates or any party in
interest to seek avoidance of or challenge the validity, force, status, extent,
and effect of Liens are hereby expressly reserved. All
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net proceeds of sale of the Acquired Assets shall be placed in escrow pending
further Orders of the Court, provided, however, Allerion may use such proceeds
to pay accrued payroll and unpaid operating expenses as of the Closing Date
which are not assumed or paid by the Buyer.
7. In the event that any Person or Entity (as those terms are defined in
the Bankruptcy Code) which has filed statements or other documents or agreements
evidencing Liens on or interests in the Acquired Assets (other than those
securing Assumed Obligations) has not delivered to the Debtor prior to the
Closing, in proper form for filing and executed by the appropriate parties,
termination statements, instruments of satisfaction, release of liens and
easements, and other documents for the purpose of documenting the release of all
Liens, or other interests which such person or entity has with respect to the
Acquired Assets, each of the Buyer and the Debtor are authorized and directed to
execute and file such statements, instruments, releases, and other documents on
behalf of the person or entity with respect to the Acquired Assets. Each such
person or entity is hereby barred from asserting any claims on such Liens or
other interests against the Buyer, its successors and assigns.
8. Upon the Closing, the Buyer shall not be deemed to (i) be the successor
of the Debtor, (ii) have, de facto or otherwise, merged with or into the Debtor,
or (iii) be a mere continuation or substantial continuation of the Debtor or the
enterprise of the Debtor.
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9. Except to the extent otherwise expressly provided in the Asset Purchase
Agreement and this Order, at the Closing, the Buyer shall not assume, nor shall
the Buyer be deemed to have assumed, any liability or obligation of the Debtor
of any kind, character or description whether known or unknown, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same is
required to be accrued on the financial statements of the holder of the
liability or obligation.
10. After the Closing, this Court shall be divested of jurisdiction of the
Acquired Assets purchased by the Buyer, except, however, the Court shall retain
jurisdiction to resolve any disputes which may arise in connection with the
Asset Purchase Agreement or this Order, and to enforce the terms of the Asset
Purchase Agreement and this Order.
11. The Debtor is authorized and directed to execute, acknowledge, and
deliver such corporate name change certificates, deeds, assignments, conveyances
and other assurances, documents, and instruments of transfer and take such other
action that may be reasonably necessary to perform the terms and provisions of
the Asset Purchase Agreement and related agreements, and shall take any other
action that may reasonably be requested by the Buyer for purposes of assigning,
transferring, granting, conveying, and confirming to the Buyer,
-6-
<PAGE>
or reducing to possession, any or all of the Acquired Assets and to execute such
nonmaterial amendments to the Asset Purchase Agreement as may be required to
effectuate the letter and intent of such agreements and the consummation of the
transactions authorized by this Order, all without further Order of the Court.
12. Allerion is hereby authorized and directed to assume the unexpired
leases or executory contracts identified in the Asset Purchase Agreement (the
"Assumed Leases" and "Assumed Contracts"), to pay to the other party to such
Assumed Leases or Assumed Contracts at Closing the amounts set forth on Exhibit
A hereto as Cure Amounts in full and complete satisfaction of all amounts due or
to become due to such parties to compensate such party for all actual pecuniary
loss to such party, and to assign their rights and obligations under such
Assumed Leases and Assumed Contracts to Buyer at Closing. Each of the Assumed
Leases and Assumed Contracts are valid and existing contracts or leases, each
constitutes an executory contract or unexpired lease under the Bankruptcy Code,
and the Debtor has satisfied all requirements of the Bankruptcy Code necessary
to assume and assign such contracts or leases to Buyer without the need for
consent of the non-debtor parties to such contracts or leases. As of the
Closing, any and all defaults under the Assumed Contracts and Assumed Leases
shall be and are hereby determined to be cured in all respects upon payments to
the non-debtor parties to such contracts or leases
-7-
<PAGE>
of the Cure Amounts. The non-debtor parties to such Assumed Contracts and
Assumed Leases shall not assert a default or make any claim against Buyer based
on any default by Debtor under such contracts or leases.
13. From and after entry of this Order, the Debtor, creditors, parties to
the Assumed Leases and Assumed Contracts, parties in interest, and each of them,
shall not take or cause to be taken any action which would interfere with the
transfer, assignment and conveyance of the Acquired Assets, the Assumed Leases
or the Assumed Contracts to the Buyer in accordance with the terms of this
Order.
14. All persons or entities who are presently, or at the Closing are, in
possession of any of the Acquired Assets are hereby directed to surrender
possession of such Acquired Assets to the Buyer at the Closing.
15. From and after the Closing, the Buyer shall have the right and
authority, subject to the terms of the Asset Purchase Agreement, to collect for
the account of the Buyer any sums which shall be due and payable on account of
any of the Acquired Assets transferred or intended to be transferred to the
Buyer at the Closing and to endorse with the name of Allerion any checks or
drafts relating to the Acquired Assets which may be payable to the order of
Allerion; provided, however, that the disposition of any such sums and any such
checks shall be in accordance with the terms of the Asset Purchase Agreement.
-8-
<PAGE>
16. As of the Closing, all agreements of any kind whatsoever and all orders
of this Court entered in this case prior to the date hereof shall be deemed
amended and/or vacated to the extent required to permit the consummation of the
transactions under the Asset Purchase Agreement. To the extent such other
agreements or orders are inconsistent with this Order or the Asset Purchase
Agreement, this Order and the Asset Purchase Agreement shall in all such cases
govern.
17. Neither the Buyer nor any secured creditor shall be liable for any
transferee tax liability that arises or may arise by operation of law from the
transfers and conveyances effected or authorized hereby, except to the extent
any such liability constitutes an Assumed Obligation. The Debtor may execute and
deliver whatever lawful agreements that are reasonably necessary and make
whatever lawful arrangements that are reasonably required to assure the transfer
and conveyance of the Acquired Assets free and clear of any claims by any
governmental unit for taxes incurred as a consequence of the sale of any of the
Acquired Assets under the terms of the Asset Purchase Agreement or to relieve
the Buyer and any secured creditor of any claim for transferee liability with
respect to such taxes.
18. Pursuant to section 365(f) of the Bankruptcy Code, conditioned upon the
Closing, all rights and obligations under the Assumed Leases and Assumed
Contracts to the extent included in the Acquired Assets and identified in the
Asset
-9-
<PAGE>
Purchase Agreement, and set forth on Exhibit A hereto, shall be assumed by
Allerion and assigned to the Buyer, without the execution of any further
documents or instruments. Upon the Closing, Allerion shall have no further
obligations under such Assumed Leases or Assumed Contracts set forth on Exhibit
A pursuant to section 365(k) of the Bankruptcy Code.
19. The provisions of this Order authorizing the Debtor to enter into the
Asset Purchase Agreement, and authorizing and directing the transactions
contemplated by said agreement shall be self-executing and neither the Debtor
nor the Buyer shall be required to execute or file any releases, termination
statements, assignments, consents, or other instruments in order to effectuate
consummation of said agreement or to implement the foregoing provisions hereof
except as provided in said agreement or in this Order. Notwithstanding the
foregoing, the Debtor, the Buyer and all other parties are authorized and
directed to take any and all actions necessary and appropriate to effectuate,
consummate, and implement fully the transactions contemplated by said agreement
and this Order.
20. The Buyer is a purchaser in good faith of the Acquired Assets and is
entitled to the protections afforded by section 363(m) of the Bankruptcy Code,
and is an assignee in good faith of the Assumed Leases and Assumed Contracts.
21. This Order is binding upon and inures to the benefit of any successors
or assigns of the Debtor or the
-10-
<PAGE>
Buyer, including any trustee appointed in this case or any subsequent case of
the Debtor under chapter 7 of the Bankruptcy Code. No provision of this Order
shall be modified, amended, revoked or terminated, whether under any plan of
reorganization or otherwise, if such modification, amendment, revocation or
termination is sought by any party receiving notice of the Motion.
22. This Order is a final, appealable order.
DATED: March 10, 1995
/s/ WILLIAM F. TUOHEY
--------------------------------
HONORABLE WILLIAM F. TUOHEY
United States Bankruptcy Judge
-11-
ALLERION INC.
PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
The Unaudited Pro Forma condensed financial statement should be read in
conjunction with the historical consolidated financial statements of the Company
and the related notes that were contained in the Company's previously filed
forms 10K, 10Q and 8K. The Unaudited Pro Forma Condensed Financial Statements
are not necessarily indicative of what the financial position and the results of
operations actually would have been if the sale of France, CSD, Australia, New
Zealand, Ultimate Data Systems, Network Services and the abandonment of Dealer
operations had occurred on the applicable dates. Moreover, they are not intended
to be indicative of future results of operations or financial position.
<TABLE>
<CAPTION>
Three Months Ended Nine Months
January 31, January 31,
------------------- ---------------------
(In thousands except per share amounts) 1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Service .......................................... $ 0 $ 0 $ 0 $ 0
Product .......................................... 0 0 0 0
------- ------- ------- --------
Total Revenue ................................. 0 0 0 0
------- ------- ------- --------
Cost of Sales:
Service .......................................... 0 0 0 0
Product .......................................... 0 0 0 0
------- ------- ------- --------
Total Cost of Sales ........................... 0 0 0 0
------- ------- ------- --------
Gross margin ....................................... 0 0 0 0
Selling, general and administrative expenses ....... 1,476 1,969 5,428 6,120
------- ------- ------- --------
Loss from operations ............................... (1,476) (1,969) (5,428) (6,120)
Provision for debt default penalty ................. (1,500)
Interest (expense) income (net) .................... (66) (110) (743) (780)
Unrealized loss on short term investment ........... (334) (501)
Other expense, net ................................. (638) (792) (61)
------- ------- ------- -------
Loss before income taxes ........................... (2,180) (2,079) (8,797) (7,462)
Provision for income taxes ......................... 0 0 37 0
------- ------- ------- -------
Net loss ........................................... ($2,180) ($2,079) ($8,834) ($7,462
------- ------- ------- -------
Average number of shares outstanding ............... 10,099 10,740 10,091 10,030
------- ------- ------- -------
Net loss per share ................................. ($0.22) ($0.19) ($0.88) ($0.74)
------- ------- ------- -------
</TABLE>
See Notes To Consolidated Financial Statements and Item 2, Management's
Discussion and Analysis of Results of Operations and Financial Condition.
1
<PAGE>
ALLERION INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
The Unaudited Pro Forma condensed financial statement should be read in
conjunction with the historical consolidated financial statements of the Company
and the related notes that were contained in the Company's previously filed
forms 10K, 10Q and 8K. The Unaudited Pro Forma Condensed Financial Statements
are not necessarily indicative of what the financial position and the results of
operations actually would have been if the sale of France, CSD, Australia, New
Zealand, Ultimate Data Systems, Network Services and the abandonment of Dealer
operations had occurred on the applicable dates. Moreover, they are not intended
to be indicative of future results of operations or financial position.
<TABLE>
<CAPTION>
ASSETS
------
January 31, April 30,
(In thousand except per share amounts) 1995 1994
---------- ---------
<S> <C> <C>
Current Assets:
Cash ........................................................................ $ 163 $ 0
Short-term investment (market value of $841 at April 30, 1994) .............. 0 400
Trade Receivables ........................................................... 0 0
Other receivables, net ...................................................... 55 1,141
Inventories, net ............................................................ 0 0
Other current assets ........................................................ 330 834
------ ------
Total current assets .................................................... 548 2,375
------ ------
Leasehold improvements and equipment, net ................................... 401 1,057
Intangibles, net ............................................................ 958 556
Other assets ................................................................ 623 821
------ ------
Total Assets ............................................................ $2,530 $4,809
====== ======
</TABLE>
See Notes To Consolidated Financial Statements and Item 2, Management's
Discussion and Analysis of Results of Operations and Financial Condition.
2
<PAGE>
ALLERION INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
January 31, April 30,
(In thousands except per share amounts) 1995 1994
---------- ---------
<S> <C> <C>
Current Liabilities:
Accounts payable ............................................................ $ 3,314 $ 3,597
Accrued liabilities ......................................................... 3,049 4,098
Deferred revenue ............................................................ 0 0
Revolving line of credit .................................................... 495 2,429
Current portion of long term debt ........................................... 4,704 4,445
-------- --------
Total current liabilities ............................................... 11,562 14,569
-------- --------
Long-Term Liabilities:
Long-term debt, net of current portion ...................................... 2,823
Other long-term liabilities ................................................. 2,660 2,749
-------- --------
Total long-term liabilities ............................................. 2,660 5,572
-------- --------
Total liabilities ........................................................... 14,222 20,141
-------- --------
Commitments and contingencies
Shareholders' Deficit:
Common stock authorized 30,000,000 shares no par value, shares issued and
10,107,622 shares outstanding at January 31, 1995, 11,315,547 shares
issued and 10,060,948 shares outstanding at April 30, 1994 ................ 16,897 16,835
Accumulated translation adjustment .......................................... 362 341
Accumulated deficit ......................................................... (22,447) (20,944)
Treasury stock at cost, 1,254,599
shares at October 31, 1994 and April 30, 1994 ............................. (11,564) (11,564)
-------- --------
Total Shareholders' Deficit ................................................. (16,752) (15,332)
-------- --------
Total Liabilities and Shareholders' Deficit ................................. $ 2,530 $ 4,809
======== ========
</TABLE>
See Notes To Consolidated Financial Statements and Item 2, Management's
Discussion and Analysis of Results of Operations and Financial Condition.
3
