<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event report) May 1, 1996
Commission File Number 0-12516
Dynamic Healthcare Technologies, Inc.
(Exact name of registrant as specified in its charter)
Nebraska
0-12516 47-0643468
(State or other jurisdiction (Commission File
Number) (IRS E.I.N.)
of Incorporation)
101 Southhall Lane, Suite 210 Maitland,
Florida 32751
(Address of principal executive offices) (ZIP Code)
(407) 875-9991
(Registrant's telephone, including area code)
None
(Former name of former address, if changed from last report)
This report consists of forty-one (41) pages.
The index to exhibit appears on page five (5).
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FORM 8-K
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
MAY 1, 1996
Item 1. Changes in Control of Registrant
None.
Item 2. Acquisition or Disposition of Assets
On May 1, 1996 pursuant to the terms of a Merger Agreement by
and among Dimensional Medicine, Inc. (LOTC: DIMM) of Minnetonka,
Minnesota ("DMI"), National Computer Systems, Inc. (the
principal shareholder of DMI), DMI Acquisition Corp. (a wholly
owned subsidiary of the Registrant, hereafter "Newco"), and the
Registrant, DMI was merged with and into Newco. Under the terms
of the Merger Agreement the Registrant paid DMI's shareholders
in the aggregate $550,200, retired approximately $600,000 of
DMI's senior debt and $500,000 of DMI's previously outstanding
Line of Credit, and agreed to assume approximately $1,350,000 of
DMI's other liabilities and costs. DMI shareholders maintain no
continuing interest in the future of DMI or Newco. Funds for
the transactions came from the Registrant's cash resources.
Terms of the Merger Agreement were based upon arms length
negotiations.
Item 3. Bankruptcy or Receivership
None.
Item 4. Changes in Registrant's Certifying Accountants
None.
Item 5. Other Events
None.
Item 6. Resignations of Registrant's Directors
None.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
The Registrant will file with the Commission the financial
statements required by this item within 60 days after the date
of this Form 8-K.
(b) ProForma Financial Information
The Registrant will file with the Commission the financial
statements required by this item within 60 days after the date
of the Form 8-K.
(c) Exhibits
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Exhibit 2(a): Merger Agreement among DMI Acquisition Corp.,
Dynamic Healthcare Technologies, Inc., National Computer
Systems, Inc., and Dimensional Medicine, Inc., dated February 5,
1996 (the "Merger Agreement").
Exhibit 2(b): Amendment to Merger Agreement, dated March 26,
1996.
Exhibit 2(c): Amendment No. 2 to Merger Agreement, dated May
1, 1996.
Exhibit 2(d): Articles of Merger and Agreement and Plan of
Merger between DMI Acquisition Corp. and Dimensional Medicine,
Inc., as filed with the Secretary of State of the State of
Florida, effective May 1, 1996.
Item 8. Change in Fiscal Year
None.
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<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 hereunto duly authorized.
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
(Registrant)
Date: May 14, 1996 /S/MITCHEL J.LASKEY
Mitchel J. Laskey
President, COO
Date: May 14, 1996 /S/PAUL S. GLOVER
Paul S. Glover
Vice President of Finance, CFO
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<PAGE>
FORM 8-K
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
INDEX TO EXHIBITS
Description of Exhibits: Page Number
Exhibit 2(a): Merger Agreement among DMI 6
Acquisition Corp., Dynamic
Healthcare Technologies, Inc.,
National Computer Systems, Inc.,
and Dimensional Medicine, Inc.,
dated February 5, 1996 (the "Merger
Agreement").
Exhibit 2(b): Amendment to Merger Agreement, 32
dated March 26, 1996.
Exhibit 2(c): Amendment No. 2 to Merger Agreement, 34
dated May 1, 1996.
Exhibit 2(d): Articles of Merger and Agreement 36
and Plan of Merger between DMI
Acquisition Corp. and Dimensional
Medicine, Inc., as filed with the
Secretary of State of the State of
Florida, effective May 1, 1996.
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Execution Copy
MERGER
AGREEMENT
by and among
DMI ACQUISITION CORP.,
a Florida corporation ("Newco"),
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
a Nebraska corporation ("DHT")
NATIONAL COMPUTER SYSTEMS, INC.
a Minnesota corporation ("NCS")
and
DIMENSIONAL MEDICINE, INC.
a Minnesota corporation (the "Corporation")
Dated
February 5, 1996
<PAGE>
<PAGE>
ARTICLE 1
THE MERGER
1.1 The Merger 1
1.2 Disseneter Rights 2
ARTICLE 2
CLOSING
2.1 The Closing 2
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Corporation 2
(a) Organization and Good Standing 2
(b) Articles of Incorporation, Bylaws and Corporate Minutes 3
(c) Capitalization of Corporation 3
(d) Athority 3
(e) Insolvency Proceedings 3
(f) Governmental Authorities 3
(g) Balance Sheet and No Material Changes 4
(h) Accounts Receivable 4
(i) Absence of Undisclosed Liabilities 5
(j) Changes 5
(k) Title and Related Matters 6
(l) Patents and Trademarks 6
(m) Tax Matters 7
(n) Broker 7
(o) Disclosure 7
(p) Agreements; Action 7
(q) Litigation and Proceedings 8
(r) Insurance 9
(s) Illicit Activities 9
(t) Claims 9
(u) Reports 9
(v) Governmental Approvals 10
(w) Employees and Employer Benefits Plans 10
(x) Labor Relations 10
(y) Fees, Commissions and Royalties 10
(z) Environmental Matters 10
(aa) FDA Regulation 11
(bb) Subsidiaries 11
(cc) Software 11
3.2 Representations and Warranties of NCS 11
(a) Representations and Warranties of the
Corporation 11
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(b) Authority 12
(c) Share Ownership 12
3.3 Representations and Warranties of Newco 12
(a) Organization and Good Standing 12
(b) Authority 12
(c) Disclosure 12
(d) No Brokerage 13
ARTICLE 4
COVENANTS
4.1 Access 13
4.2 Conduct of Business 13
4.3 Negative Covenants 13
4.4 Satisfaction of Conditions 14
4.5 Consents 14
4.6 Voting 14
4.7 Tax Sharing Agreement 14
4.8 Employee Benefit Plans 14
4.9 Confidentiality 15
4.10 No Solicitation 15
4.11 Covenants of the Corporation 15
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to the Obligations of Newco 15
(a) Representations True at Closing 16
(b) Compliance with Conditions of Agreement 16
(c) Lack of Material adverse Change 16
(d) Compliance Certificate from Corporation 16
(e) Board and Shareholder Approval 16
(f) Secretary's Certificate from Corporation 16
(g) Secretary's Certificate from NCS 16
(h) Compliance Certificate from NCS 16
(i) Opinion of Counsel 16
(j) Information 16
(k) Employee Benefit Plans 17
(l) Service Agreement 17
(m) Security Interest 17
(n) General Assignment 17
(o) Absence of Litigation or Claim 17
(p) All Proceedings to be Satisfactory 17
(q) Consents 17
5.2 Conditions Precedent to Obligations of Corporation and
NCS 17
(a) Representations True at Closing 17
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(b) Compliance with Conditions of Agreement 18
(c) Norwest Bank 18
(d) Lease Commitment 18
(e) Promissory Note 18
(f) Opinion of Counsel 18
(g) Customer Support Agreements 18
(h) Compliance Certificate from Newco 18
(i) Secretary's Certificate from Newco 18
(j) Absence of Litigation or Claim 18
(k) All Proceedings to be Satsfactory 19
(l) Shareholder Approval 19
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification 19
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Survival of Representations and Warranties 21
7.2 Notices 21
7.3 Notification of Certain Matters 22
7.4 Termination 22
7.5 Knowledge 23
7.6 No Assignment 23
7.7 Severability 23
7.8 Governing Law 23
7.9 Schedules 23
7.10 Incorporation and Amendment 23
7.11 Remedies 24
7.12 Waiver 24
7.13 Headings 24
7.14 Further Action 24
7.15 Counterparts 24
7.16 Venue 24
7.17 Public Announcements 24
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EXHIBITS
A Florida Agreement and Plan of Merger
B Minnesota Agreement and Plan of Merger
C Opinion of Lindquist & Vennum
D Opinion of Cohen, Berke, Bernstein, Brodie,
Kondell & Laszlo, P.A.
E Letter Agreement
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<PAGE>
SCHEDULES
3.1(a) States in Which Qualified to Do Business
3.1(c) Outstanding Subscriptions, Warrants, Options and
Commitments
3.1(f) Required Filings with Governmental Authorities
3.1(g) Financial Statements
3.1(h) Accounts Receivables
3.1(j) Changes
3.1(k) Tangible Property
3.1(l) Patents and Trademarks
3.1(m) Tax Matters
3.1(n) Brokers
3.1(p) Agreements; Actions
3.1(q) Pending or Threatened Litigation
3.1(r) Insurance
3.1(t) Claims
3.1(w) Employee Benefit Plans
3.1(y) Fees, Commissions and Royalties
3.1(aa) FDA Matters
3.1(bb) Subsidiaries
3.1(cc) Software Rights
5.2(d) Lease Commitments
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<PAGE>
MERGER AGREEMENT
THIS AGREEMENT is made and entered into as of 5th February,
1996, by and among DMI ACQUISITION CORP., a Florida corporation
("Newco"), DYNAMIC HEALTHCARE TECHNOLOGIES, INC., a Nebraska
corporation ("DHT"), NATIONAL COMPUTER SYSTEMS, INC., a
Minnesota corporation ("NCS") and DIMENSIONAL MEDICINE INC., a
Minnesota corporation (the "Corporation").
W I T N E S S E T H:
WHEREAS, the Corporation has 50,000,000 shares of common stock
(the "Common Stock"), $.15 par value per share, authorized, of
which 32,533,460 shares are issued and outstanding;
WHEREAS, NCS owns 27,653,441 shares of Common Stock
constituting 85% of the issued and outstanding Common Stock (the
"Majority Shares");
WHEREAS, Newco is a newly formed Florida corporation and a
wholly owned subsidiary of DHT.
WHEREAS, the parties hereto each desire that the Corporation be
merged with and into Newco and that the holders of the Common
Stock of the Corporation shall receive in exchange for such
shares the consideration set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and the
mutual representations, warranties, covenants and agreements
contained herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Subject to the terms and conditions set forth
herein, the Corporation will be merged with and into Newco (the
"Merger"), and in accordance with the Florida Business
Corporation Act ("FBCA") and the Minnesota Business Corporation
Act ("MBCA") the separate corporate existence of the Corporation
shall cease and Newco shall be the surviving corporation in the
Merger. An Agreement and Plan of Merger in accordance with the
FBCA (the "Florida Agreement of Merger"), in the form attached
hereto as Exhibit "A," and an Agreement and Plan of Merger in
accordance with the MBCA (the "Minnesota Agreement of Merger"),
in the form attached hereto as Exhibit "B" (the Minnesota
Agreement of Merger and the Florida Agreement of Merger may be
referred to herein collectively, as the "Agreement of Merger")
shall be executed and delivered concurrently with the Closing.
Pursuant to the terms contained in the Agreement of Merger, the
consideration paid for (a) the shares of the Corporation's
Common Stock owned by NCS shall be cash in the amount of
$355,000; and (b) the remaining 4,880,019 outstanding shares of
the Corporation's Common Stock shall be $.04 per share or an
aggregate of $195,000. The Agreement of Merger provides for the
terms of the Merger, the mode of carrying the same into effect
and the manner of converting the Corporation's Common Stock into
the consideration set forth therein. The "Effective Date" shall
be the date set forth as such in the Florida Agreement of Merger
and theMinnesota Agreement of Merger. On the "Effective Date,"
each and every share of the Corporation's Common Stock and other
capital stock of the Corporation, if any, and any and all
options, warrants or other commitments to purchase or acquire
shares of the capital stock of the Corporation shall be
cancelled, terminated and of no further force or effect.
<PAGE>
1.2 Dissenter Rights. In the event a shareholder of the
Corporation exercises such shareholder's right to dissent to the
Merger, pursuant to applicable state law, the Corporation shall
promptly notify Newco in writing of such exercise of dissenter's
rights. The Corporation shall not settle, compromise, or pay
any dissenter rights without the prior written consent of Newco
and consultation therewith.
ARTICLE 2
CLOSING
2.1 The Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place
at Miami, Florida at 10:00 a.m. in the offices of Cohen, Berke,
Bernstein, Brodie, Kondell & Laszlo, P.A. at 2601 South Bayshore
Drive, 19th Floor, Miami, Florida, or any other place agreed to
by the parties, within forty-eight (48) hours after the approval
of the Merger by the Corporation's shareholders and all other
closing conditions are met. Such shareholder approval will be
sought at the earliest date practicable but in no event later
than May 15, 1996. Executed documents may be held in escrow, as
the parties agree, pending the satisfaction of any conditions to
close. The date of the Closing shall be referred to as the
"Closing Date".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Corporation. The
Corporation, hereby makes the following representations and
warranties to Newco:
(a) Organization and Good Standing. The Corporation is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota; the
Corporation has all requisite corporate power, franchises,
licenses and authority to own, lease and operate its business as
it is being conducted; and the Corporation is duly qualified to
do business in all states where the character of the property
owned or leased by it or the nature of its activities make such
qualification necessary, except for those jurisdictions where
the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the properties,
operations, business or financial condition of the Corporation,
as set forth on Schedule 3.1(a) hereto;
(b) Articles of Incorporation, Bylaws and Corporate Minutes.
Copies of the Articles of Incorporation and Bylaws of the
Corporation and all amendments and restatements thereto
delivered to Newco are true, correct and complete copies thereof
and have not been amended since such delivery.
(c) Capitalization of Corporation. (i) The authorized and
outstanding capital stock of the Corporation is as follows:
Number of Shares Shares
Authorized Class of Stock Par Value Outstanding
50,000,000 Common $.15 32,533,460
Except as described on Schedule 3.1(c) hereto, there are not
currently outstanding, any subscriptions, warrants, or options
or other commitments (including conversion or preemptive
rights), with respect to the purchase or acquisition from the
Corporation of any shares of its capital stock. As of the
Effective Date all such subscriptions, warrants, options or
other commitments shall be cancelled, terminated and of no
further force or effect.
<PAGE>
(d) Authority. The Corporation has all requisite legal and
corporate power necessary to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement shall
not (i) result in the breach or violation of any term or
provision of or constitute a default under or conflict with any
term or provision of the Corporation's Articles of
Incorporation, as amended, or By-Laws, as amended, or any
material contract, agreement, lease, commitment, license,
franchise, permit, authorization or concession to which the
Corporation is a party or by which the Corporation is bound, or
constitute an event which with notice, lapse of time, or both,
would result in any such breach, violation or default, or (ii)
result in the violation by the Corporation of any statute, rule,
regulation, ordinance, code, order, judgment, writ, injunction,
decree or award, or constitute an event which with notice, lapse
of time, or both, would result in any such violation. The
execution, delivery and performance of the obligations of
Corporation under this Agreement has been duly and effectively
authorized by the Corporation's Board of Directors and will be
on the Closing Date duly and effectively authorized by the
Corporation's Board of Directors and shareholders, and no
further corporate authority therefor or approval thereof is
required by law.
(e) Insolvency Proceedings. No insolvency proceedings,
including bankruptcy, receivership, reorganization, composition
or arrangement with creditors, are pending or, to the
Corporation knowledge and belief threatened against Corporation
except as disclosed herein. Furthermore, the Corporation shall
not institute any such action, in any form whatsoever, prior to
Closing, unless specifically consented to by Newco in writing.
(f) Governmental Authorities. Except as identified on
Schedule 3.1(f), the Corporation is not required to submit any
notice, report or other filing to any governmental or regulatory
agency, nor is any notice or report required to be obtained by
the Corporation in connection with the execution or delivery of
this Agreement or the consummation of the transactions
contemplated hereby.
(g) Balance Sheet and No Material Changes
(1) Corporation has heretofore furnished Buyer with its Form
10-K for the year ended March 31, 1995, containing the audited
financial statements of the Corporation including the
Corporation's balance sheets as of March 31, 1995 and March 31,
1994 (the "Balance Sheet"), and the related statements of
operations, shareholders' equity and cash flows, for the period
ended March 31, 1995, audited by Ernst & Young, LLP, certified
public accountants, and its Form 10-Q for the quarter ended
December 31, 1995, containing internally prepared unaudited
balance sheets andincome statements dated as of December 31,
1995, copies of which are attached hereto as Schedule 3.1(g))
(collectively, the "Financial Statements"). The Financial
Statements, including the footnotes thereto to the extent
appended, except as indicated therein, have been prepared in
accordance with generally accepted accounting principles
("GAAP") consistently followed through the periods indicated.
The Financial Statements fairly represent the financial
condition of the Corporation as of the date thereof and, except
as indicated therein, reflects all claims against and all debts
and liabilities of the Corporation required to be reported under
GAAP, fixed or contingent, as of the respective date thereof and
the related statements of income, statements of cash flow,
shareholders' equity and changes in financial position fairly
present the results of the operations of the Corporation and the
changes in the Corporation's financial position for the period
indicated. Since the Balance Sheet date, except as disclosed on
any schedule hereto there has been (i) no material adverse
change in the assets or liabilities, or in the business or
condition of the Corporation, financial or otherwise, or the
result of operations of the Corporation, whether as a result of
any legislative or regulatory change, revocation of any license
or right to do business, casualty, labor, Act of God or other
public force or otherwise, and (ii) no change in the assets or
liabilities or in the business or condition of the Corporation,
financial or otherwise, or in the results of operations or
prospects of the Corporation, except in the ordinary course of
business; and (iii) no factor or condition exists or, to the
Corporation's knowledge and belief, is contemplated or
threatened, which might cause such a change in the future except
as disclosed on any schedule hereto, and (iv) no dividends or
other distributions have been paid or made upon any shares of
capital stock of the Corporation nor have any shares of capital
stock of the Corporation been redeemed, retired, purchased or
acquired for value by the Corporation.
<PAGE>
(h) Accounts Receivable. Except as otherwise set forth in
Schedule 3.1(h), none of the accounts receivable of the
Corporation are subject to any stated claim of offset,
recoupment, setoff or counterclaim, and the Corporation has no
knowledge of any facts or circumstances giving rise to such
claim. Furthermore, except as set forth on Schedule 3(h), no
such account receivable is contingent upon the performance by
the Corporation of any obligation or contract. Except as
otherwise set forth in Schedule 3.1(h), no person has any lien
on such receivables or any part thereof, no agreement for
deduction, free goods, discount or other deferred price has been
made with respect to any of such accounts receivable.
(i) Absence of Undisclosed Liabilities. The Corporation
represents and covenants that there are not presently, nor were
there as of the dates of the Financial Statements, any
liabilities or commitments, accrued absolute, contingent or
otherwise, of the Corporation, except liabilities or commitments
(i) reflected on the Financial Statements; (ii) liabilities or
commitments incurred by the Corporation in the ordinary course
of its business since the date of the Financial Statements which
in the aggregate do not exceed $15,000; or (iii) liabilities and
commitments identified in this Agreement or any schedule or
exhibit hereto.
(j) Changes. Since Balance Sheet date, except as disclosed in
Schedule 3.1(j), there has not been:
(1) any change in the assets, liabilities, condition
(financial or otherwise), affairs, earnings, business,
operations, or prospects of the Corporation except for changes
in the ordinary course of business which have not been, either
individually or in the aggregate, materially adverse;
(2) any change in the liabilities or obligations of the
Corporation, contingent or otherwise, whether due or to become
due, whether by way of guaranty, endorsement, indemnity,
warranty, or otherwise, except current liabilities incurred in
the ordinary course of business, none of which materially and
adversely affects the business, prospects, condition, affairs,
properties or assets of the Corporation;
(3) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the properties,
operation or business of the Corporation;
(4) any waiver by the Corporation of a valuable right or of a
material debt owed to it;
(5) any loans made by the Corporation to its employees,
officers, or directors other than advances of expenses made in
the ordinary course of business;
(6) any declaration or payment of any dividend or other
distribution of the assets of the Corporation or any direct or
indirect redemption, purchase or acquisition of any securities
of the Corporation;
(7) any labor organization activity or organized labor
trouble;
(8) any sale, transfer, or lease of any of the Corporation's
assets except in the ordinary course of business or any mortgage
or pledge of or lien imposed upon any of the Corporation's
assets;
(9) to the best of the Corporation's knowledge, any other
event or condition of any character which has materially and
adversely affected the business, prospects, condition, affairs,
operations, properties or assets of the Corporation;
(10) any increase in compensation of any of its existing
officers, or the rate of pay of its employees as a group, except
as part of regular compensation increases in the ordinary course
of business;
(11) the resignation or termination of John Paumen, John
McGibbon, Valerie McGibbon, Clark Zumbach, Mark Blatzheim or Ken
Waldbillig;
<PAGE>
(12) any change in the accounting methods or practices
followed by the Corporation;
(13) any issuance of any stock, bonds, or other securities of
the Corporation or options, warrants, or rights or agreements or
commitments to purchase or issue such securities or grant such
options, warrants or rights; or
(14) any agreement by the Corporation to do or enter into any
of the foregoing.
(k) Title and Related Matters. Schedule 3.1 (k) is a true and
correct listing of all categories and the net book value of all
tangible property (real and personal) owned or leased by the
Corporation which are not set forth on the Financial Statements.
The Corporation has good andmarketable title to all of the
assets free and clear of all mortgages, liens, pledges, charges
and encumbrances, easements, liabilities, or any other adverse
claims of every kind or character, except as so indicated on
Schedule 3.1(k). All of the assets necessary for the operation
of the Corporation's business, including real and personal
property and leasehold interests, of the Corporation are in good
and satisfactory working condition.
(l) Patents and Trademarks. Schedule 3.1(l) contains a true
and correct list of all registered patents, patent applications,
trademarks, trade names, copyrights, intellectual properties or
service marks owned by or registered in the name of the
Corporation. Furthermore, except as shown on Schedule 3.1(l),
there are no material unregistered patents, patent applications,
trademarks, tradenames, copyrights, intellectual properties or
servicemarks owned by the Corporation. Except as shown on
Schedule 3.1(l), there are no outstanding claims, liens,
encumbrances, options, licenses, or agreements of any kind
relating to the foregoing, nor is the Corporation bound by or
party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, tradenames,
copyrights, trade secrets, licenses, information, proprietary
rights and processes of any other person or entity. To its best
knowledge and belief, the Corporation has sufficient title and
ownership of all patents, licenses, trademarks, servicemarks,
trade names, copyrights to conduct its business as now operated
without any conflict with or infringement of the rights of
others. To the knowledge and belief of the Corporation, the
Corporation has not infringed or violated in any way any valid
patent, trademark, trade name or copyright of others, nor has
the Corporation received any notice, claim or protest respecting
any such violation or infringement. The Corporation is not
aware that any of its employees is obligated under any contract
(including licenses, covenants, or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with
the use of such employee's best efforts to promote the interests
of the Corporation or that would conflict with the Corporation's
business as currently conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the
Corporation's business by the employees of the Corporation, nor
the conduct of the Corporation's business as currently
conducted, will, to the Corporation's knowledge, conflict with
or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated.
The Corporation does not believe it is or will be necessary to
utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the
Corporation.
(m) Tax Matters. Except as set forth on Schedule 3.1(m), the
Corporation has filed or caused to be filed, within the times
and within the manner prescribed by law, all Federal, state,
local and foreign tax returns and reports heretofore required to
be filed by it, and has no current extensions for the filing of
any such returns or reports, or delinquent liabilities. To the
Corporation's best knowledge and belief, such returns and
reports reflect accurately all tax liability of the Corporation
for the periods covered thereby. All Federal, state, local and
foreign income, profits, franchise, sales, use, occupancy,
excise and other taxes and assessments (including interest and
penalties) payable by, or due from, the Corporation (including
for this purpose any subsidiary of the Corporation, for such
taxable period or periods in which such former subsidiary was an
affiliated group as defined in Section 1504(a) of the Internal
Revenue Code of 1986, as amended, of which the Corporation was a
member) has been fully paid or adequately disclosed and fully
provided for in the books and financial statements of the
Corporation. No examination of any tax return of the
Corporation is currently in progress or has
<PAGE>
been noticed except as set forth on Schedule 3.1(m).
There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return
of the Corporation.
(n) Broker. No agent, broker or other person acting pursuant
to authority of Corporation is entitled to any commission or
finder's fee in connection with the transactions contemplated by
this Agreement, except as disclosed on Schedule 3.1(n).
(o) Disclosure. No representation, statement or information
which has been or shall be made or furnished by the Corporation
to Newco, including but not limited to those contained in this
Agreement and the schedules hereto and/or any other schedules,
listings or other written information furnished by Corporation,
contains, or shall contain, any untrue statement of material
fact or omits or shall omit any material fact necessary to make
the information contained in such representation, or
information, in light of the circumstances under which they were
made not misleading.
(p) Agreements; Action.
(1) Except as listed on Schedule 3.1(p) hereto, there are no
agreements, understandings, instruments, contracts, or proposed
transactions between the Corporation and the NCS.
(2) Except as listed on Schedule 3.1(p) hereto, there are no
agreements, understandings, instruments, contracts, proposed
transactions to which the Corporation is a party or by which it
is bound which (a) involve obligations (contingent or otherwise)
of, or payments to the Corporation in excess of, $15,000, (b)
are material to the conduct and operations of the Corporation's
business or properties, including, without limitation, the
license of any patent, copyright, trade secret, or other
proprietary rights to or from the Corporation or provisions
restricting or affecting the development, manufacture, or
distribution of the Corporation's products or services, (c)
involve any employment or consulting arrangement, whether
written or oral, between the Corporation and any person or (d)
provide for the grant to any person of a right to cause the
Corporation to register any securities of the Company for sale.
(3) Since the date of the Financial Statements, except as
listed on Schedule 3.1(p) hereto, the Corporation has not (a)
declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its
capital stock, (b) incurred any indebtedness for money borrowed
or any other liabilities individually in excess of $15,000 or,
in the case of indebtedness and/or liabilities individually less
than $15,000, in excess of $15,000 in the aggregate, (c) made
any loans or advances to any person, other than ordinary
advances for travel expenses, or (d) sold, exchanged, or
otherwise disposed of any of its assets or rights, other than
the sale of its inventory in the ordinary course of business.
(4) For the purposes of subsections (2) and (3) above, all
indebtedness, liabilities, agreements, understandings,
instruments, contracts, and proposed transactions involving the
same person or entity (including persons or entities the
Corporation has reason to believe are affiliated therewith)
shall be aggregated for the purpose of meeting the individual
minimum dollar amounts of such subsections.
(5) The Corporation is not a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument
or subject to any charter or corporate restriction which has a
material adverse effect on the Corporation or limits or
restricts the ability of the Corporation to carry out its
obligations under this Agreement. The Corporation is not in
material default in any respect in the performance, observance
or fulfillment of any of the obligations,covenants or conditions
contained in any agreement or instrument material to its
business to which it is a party.
(q) Litigation and Proceedings. There is no suit, arbitration
or legal proceeding or investigation pending or, to the
Corporation's knowledge and belief any threatened or
contemplated suit, arbitration, legal proceeding or
investigation, either administrative or judicial, relating to
the Corporation or its business, the contracts set forth on
Schedule 3.1(p) hereto or the transactions contemplated by this
Agreement
<PAGE>
which if determined or resolved adversely to the
Corporation may reasonably be expected to have a materially
adverse effect on the properties, operations, business or
financial condition of the Corporation, except as set forth and
described in Schedule 3.1(q). The Corporation is not, to its
best knowledge and belief, the subject of any investigation or
proceeding by any governmental body relating to its business.
The Corporation is not subject to, nor in default of, any
indictment, order or award of any court, arbitrator or
governmental body, domestic or foreign, relating to its business.
(r) Insurance. The insurance policies owned by the
Corporation are valid and enforceable in accordance with their
terms and are now outstanding, duly in force, and provide
adequate insurance for the Corporation's business and the
Corporation's assets. Schedule 3.1(r) sets forth a list of all
insurance policies owned by the Corporation, the identity of the
insurance company, the type and amount of coverage, the
expiration dates of the policies, the parties insured, and the
amount of premiums for the respective policies.
(s) Illicit Activities. Neither Corporation nor, to the
Corporation's best knowledge and belief, any of the
Corporation's directors, officers or employees have, in
connection with the operation of its business:
(i) Made any illegal political contributions from the
Corporation's assets; or
(ii) Been involved in the disbursement or receipt of
corporate funds outside the normal systems of accountability; or
(iii) Made or received payments, whether directly or
indirectly, to or from foreign or domestic governments,
officials, employees or agents for purposes other than the
satisfaction of lawful obligations, or been involved in any
transaction that has as its intended effect the transfer of the
Corporation's assets in the manner described; or
(iv) Been involved in the improper or inaccurate recording of
payments and receipts on the books of the Corporation or any
other matters of a similar nature involving disbursements of the
Corporation's assets.
(t) Claims. Schedule 3.1(t) contains a true and complete list
of all claims in excess of Five Thousand Dollars ($5,000.00)
which have been asserted in respect of the Corporation's
business since January 1, 1992, with respect to any express or
implied representation, warranty, agreement or guarantee made
(or claimed to have been made), or imposed, or asserted to be
imposed by operation of law, in connection with any product or
service provided by, or sold in the course of, the Corporation's
business, and a summary description of the status or disposition
of each such claim. All of such claims were and are covered
under the professional liability insurance policies,
self-insurance programs or reserves of the Corporation.
(u) Reports. The Corporation has furnished an accurate and
complete copy of each registration statement, report and proxy
statement filed by the Corporation with the Securities and
Exchange Commission (the "Commission") since December 31, 1992
(collectively, the "SEC Reports"). None of such SEC Reports
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. Since
December 31, 1992, the Corporation has filed all required forms,
reports and documents with the Commission required to be filed
by it pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Exchange Act of 1934, as amended (the
"Exchange Act"), all of which complied at the time of filing in
all material respects with all applicable requirements of the
Securities Act and the Exchange Act.
(v) Governmental Approvals. The Corporation has, to its best
knowledge and belief, taken all necessary actions to provide
that in the conduct of its business, the use and occupancy by
the Corporation of all facilities and properties upon which the
operations of its business are conducted and the products
developed or services provided in the conduct of its business is
and shall continue to be in compliance in all respects with all
<PAGE>
Federal, state, county, local or other governmental statutes and
ordinances, and with all rules and regulations of all Federal,
state, county, local and other governmental agencies and bodies,
applicable to it, and to the conduct of its business where
non-compliance may reasonable be expected to have a material
adverse effect on the properties, operations, business or
financial condition of the Corporation.
(w) Employees and Employer Benefit Plans. The Corporation has
no employee benefit plan of any kind or nature except as set
forth on Schedule 3.1(w).
(x) Labor Relations. There has not been, nor is there
threatened, any strike, slowdown, picketing or work stoppage by
any union against the Corporation's premises or products, any
secondary boycott with respect to the Corporation or its
products, any lockout by the Corporation of any of its employees
or any other labor trouble or other occurrence, event or
condition of a similar character affecting, or which may affect,
the operations or conditions of the Corporation.
(y) Fees, Commissions and Royalties. Corporation has no
relationship with any distributor, agent, employee or other
representative anywhere in the world which is entitled to fees,
commissions, royalties or any other payments as a result of the
sale of the Corporation's securities, products, services, or
pursuant to its on going business, except as disclosed in
Schedule 3.1(y);
(z) Environmental Matters. The Corporation has, to its best
knowledge and belief, all governmental licenses and permits
necessary in order to conduct its business and where the failure
to have such permit or license would have a materially adverse
effect on the properties, operations, business or financial
condition of the Corporation, including any such licenses or
permits required for the storage, treatment and disposal of any
materials defined as "hazardous substances" under the Federal
Comprehensive Environmental Response Compensation and Liability
Act ("CERCLA") and similar state laws: (i) to or at any
location other than a site lawfully permitted to receive such
hazardous waste, hazardous substances or other material which
may constitute an environmental hazard for such purposes, (ii)
to or at any location designated for remedial action pursuant to
CERCLA or any similar state laws, or (iii) not in contravention
of any environmental laws, regulations, ordinances or rules.
The Corporation has not discharged, dumped, buried, spilled or
otherwise released any hazardous substances, or any other
material which may constitute an environmental hazard, into or
on any property or facility which the Corporation owns, leases
or operates, including the soil, surface water and ground water,
in violation of any environmental laws,regulations, ordinances
or rules. To the Corporation's knowledge and belief, no
inspection, audit, or other investigation has been conducted as
to the quality of the air, surface or sub-surface conditions at
any property or facility which the Corporation owns, leases or
operates, by any person, including governmental agencies. The
Corporation has not received (i) any notice that any person,
including governmental agencies, proposes to carry out an
inspection, audit or other investigation of or at any property
or facility which the Corporation owns, leases or operates, (ii)
any notice that conditions at any such property or facility are
in violation of any environmental laws, regulations, ordinances
or rules, or (iii) any notice (including requests for
information) from any person, including governmental agencies,
asserting that the Corporation is or may be a "potentially
responsible party" or otherwise liable with respect to a
remedial action or the payment of response costs at a waste
storage, treatment or disposal facility, pursuant to CERCLA or
any similar state laws.
(aa) FDA Regulation. Except as provided in Schedule 3.1(aa),
the Corporation's business as presently conducted, complies with
all applicable regulations promulgated by the United States Food
and Drug Administration (the "FDA") when noncompliance may
reasonably be expected to have a materially adverse effect on
the properties, operation, business or financial condition of
the Corporation. The Corporation has filed with and received
approval from the FDA with respect to 510(k) Reports relating to
the Corporation's products marketed under the name "Maxiview"
"Maxfile" and "Powerstation," respectively.
(bb) Subsidiaries. Except as listed on Exhibit 3.1(bb)
hereto, the Corporation does not presently own or control
directly or indirectly any interest in any other corporation,
association, or other business entity.
<PAGE>
(cc) Software. The Corporation has complete and exclusive
right, title, and interest in and to all tangible and intangible
property rights existing in the software listed on Schedule
3.1(cc) hereto (the "Software"). The Software has either been
acquired or developed by the Corporation entirely through its
own efforts for its own account and the Software is free and
clear of all liens, claims, co-ownership rights of any kind or
nature, encumbrances, or equities whatsoever of any third party
except as set forth on Schedule 3.1(cc). The Software does not
infringe any patent, copyright, or trade secret of any third
party; the Software is fully eligible for protection under
applicable copyright law and has not been forfeited to the
public domain; and the source code and system specifications for
the Software have been maintained in confidence or when
disclosed been subject to a confidentiality agreement. All
personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the
conception and development of the Software either (1) have been
party to a for-hire relationship with the Corporation that has
accorded the Corporation full, effective, and exclusive original
ownership of all tangible and intangible property thereby
arising with respect to the Software, or (2) have executed
appropriate instruments of assignment in favor of the
Corporation as assignee that have conveyed to the Corporation
full, effective, and exclusive ownership of all tangible and
intangible property thereby arising with respect to the
Software. There are no agreements or arrangements in effect
with respect to the marketing, distribution, licensing, or
promotion of the Software by any independent salesperson,
distributor, sublicensor, or other remarketer or sales
organization except as set forth on Schedule 3.1(cc).
3.2 Representations and Warranties of NCS. NCS makes the
following representations and warranties to Newco:
(a) Representations and Warranties of the Corporation. To
NCS's knowledge, the representations and warranties of the
Corporation are true and correct.
(b) Authority. NCS has all requisite legal and corporate
power necessary to execute, deliver and perform this Agreement
and to carry out the transactions contemplated hereby. The
execution, delivery and performance of this Agreement shall not
(i) result in the breach or violation of any term or provision
of or constitute a default under or conflict with any term or
provision of NCS's Articles of Incorporation, as amended, or
By-Laws, as amended, or any material contract, agreement, lease,
commitment, license, franchise, permit, authorization or
concession to which NCS is a party or by which NCS is bound, or
constitute an event which with notice, lapse of time, or both,
would result in any such breach, violation or default, or (ii)
result in the violation by NCS of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or
award, or constitute an event which with notice, lapse of time,
or both, would result in any such violation. The execution,
delivery and performance of the obligations of NCS under this
Agreement has been, and will be on the Closing Date, duly and
effectively authorized by NCS and no further corporate authority
therefor or approval thereof is required by law.
(c) Share Ownership. NCS is not a party or subject to any
agreement or understanding, and there is no agreement or
understanding between any persons and/or entities, which affects
or relates to the voting or giving of written consents with
respect to the Majority Shares. NCS is the lawful owner of, and
has good and marketable title to the Majority Shares, free and
clear of any mortgages, pledges, claims, liens, charges or
encumbrances of any kind.
3.3 Representations and Warranties of Newco. Newco makes the
following representations and warranties to the Corporation and
NCS:
(a) Organization and Good Standing. Newco is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Nebraska and is duly qualified to do
business in all states where its activities make such
qualification necessary.
(b) Authority. Newco has full power and has taken all
corporate action necessary to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement shall
not (i) result in the breach or violation of any term or
<PAGE>
provision of or constitute a default under or conflict with any
term or provision of its Articles of Incorporation, as amended,
or By-Laws, as amended, or any material contract, agreement,
lease, commitment, license, franchise, permit, authorization, or
concession to which it is a party or by which it is bound, or
constitute an event which with notice, lapse of time, or both,
would result in any such breach, violation or default, or (ii)
result in the violation by it of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or
award, or constitute an event which with notice, lapse of time,
or both, would result in any such violation. The execution,
delivery and performance of the obligations of Newco under this
Agreement has been duly and effectively authorized by Newco's
Board of Directors and no further corporate authority therefor
or approval thereof is required by law. This Agreement
constitutes a valid and binding agreement of Newco.
(c) Disclosure. No representation, statement or information
which has been or shall be made to Corporation or NCS in or
pursuant to this Agreement or in connection with preparation of
materials for submission to the Corporation's shareholders
contains or shall contain any untrue statement of a material
fact or omits or shall omit to state a material fact necessary
to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(d) No Brokerage. Newco has not employed any broker or finder
or has incurred or will incur any broker's, finder's or similar
fees, commissions or expenses in connection with the
transactions contemplated by this Agreement.
ARTICLE 4
COVENANTS
4.1 Access. The Corporation shall give to Newco, from and
after the date of execution of the Agreement until the Closing,
access to its premises during normal business hours in order to
enable Newco to inspect its business. The Corporation shall
make available for review all information in its possession
reasonably requested by Newco which is related to its business.
The Corporation shall also permit Newco to meet with and
question their independent certified public accountants and
other advisors. The parties acknowledge that said activities
shall be conducted during normal business hours and shall not
disrupt or interfere with the conduct of the Corporation's
business.
4.2 Conduct of Business. From the date hereof, until Closing,
the Corporation shall: (a) provide Newco with weekly written or
telephonic reports relating to the Corporation's business
operations and with such information as Newco reasonably
requests in writing, telephonically or at a meeting, (b) enter
into joint marketing activities with Newco in accordance with
the terms of a letter agreement attached hereto as Exhibit "E"
pursuant to which Newco shall receive thirty (30%) percent of
all net licensing fees, (c) operate and conduct its business in
a reasonable diligent manner and in the ordinary course
consistent with past custom and practice; (d) use best efforts
to maintain and safeguard its properties; (c) use best efforts
to preserve intact its organization and personnel; (e) use best
efforts to preserve intact its relationships with vendors,
customers and others having business relations with them; (f)
carry insurance, including liability insurance, in character and
amount in accordance with past custom and practice; (g) notify
Newco of any lawsuits, claims, proceedings or investigations
that are instituted against them, their officers or directors,
or, to their knowledge, threatened against them, their officers
or directors; and (h) use reasonable best efforts to comply in
all material respects with all material laws, rules, regulations
and governmental authorities applicable to it and to the conduct
of its business.
4.3 Negative Covenants. The Corporation covenants and agrees
that, from the date hereof until the Closing Date, it shall not
without the prior written consent of Newco or DHT, where such
consent may be granted or withheld at the sole discretion of
Newco or DHT, (a) make any changes to its Articles of
Incorporation or By-Laws; (b) borrow money without the consent
of Newco; (c) sell, transfer, assign, mortgage, pledge,
encumber, or permit the creation of any lien or security
interest with respect to, any assets or properties; (d) make any
material investment or expenditure of a capital nature greater
than $15,000; (e) enter into any material contracts or
commitments for greater than $15,000; (f) hire additional
management personnel earning an annual salary greater
<PAGE>
than $25,000 or terminate existing management employees as identified
in Section 3.1(j)(ii) herein; (g) enter into any joint venture,
licensing, partnership or other similar agreement with any party
or modify, assign or hypothecate any existing agreements; (h)
declare any dividends or make other distributions with respect
to its capital stock; (i) authorize, issue, sell or exchange any
debt or equity securities, or any stock options or warrants; (j)
make loans, advances or prepayments or extend credit to any of
its shareholders, officers or directors except current credit
agreements; or (k) sell, discount for cash or factor accounts
receivable or enter into similar transactions.
4.4 Satisfaction of Conditions. The parties hereto shall use
their best efforts to satisfy all conditions precedent to the
Closing on or prior to the Closing Date.
4.5 Consents. The parties shall obtain all material consents,
assignments or approvals of third parties which may be required
to any and all of the transactions contemplated hereby. The
Corporation shall use its best efforts to prepare, file with the
U.S. Securities and Exchange and distribute to shareholders a
proxy statement, and all other documents relating thereto, and
hold a shareholders' meeting relating to the approval of the
transaction contemplated by this Agreement as soon as reasonably
possible. All disclosure in such documents relating to Newco
and the transactions contemplated by this Agreement shall be
subject to Newco's approval. The Corporation shall use its best
efforts to obtain shareholder approval of the Merger.
4.6 Voting. NCS shall vote the Majority Shares in favor of all
transactions necessary to accomplish the Merger between the
Corporation and Newco and the transactions contemplated by this
Agreement, provided, however, NCS shall not be obligated to vote
in favor of the Merger if and only if NCS reasonably determines,
in good faith and after full and advised consideration, that
such vote in favor of the Merger would cause NCS to breach its
fiduciary duties under applicable law.
4.7 Tax Sharing Agreement. Within forty-five (45) days after
the Closing Date, NCS shall deliver to Newco a final computation
reflecting the amount owed as of the Closing Date to the
Corporation or to NCS pursuant to the Tax Sharing Agreement,
effective as of December 20, 1993. Newco shall have a period of
ten (10) days to agree or disagree with such computation. If
Newco disagrees with such computation, an independent third
party mutually agreed upon by Newco and NCS shall compute the
amount owed and such determination shall be binding upon NCS and
Newco. The amount owed for the period ending January 31, 1996
shall be paid within ten (10) days of determination. The
remainder which is associated with NCS's tax year ending January
31, 1997 shall be paid upon NCS's filing of its tax return for
the fiscal year ending January 31, 1997.
4.8 Employee Benefit Plans. Commencing on the Closing Date,
the Corporation's employees shall be entitled to participate in
Newco's employee benefit plans. For purposes of participating
in such plans the Corporations employees shall be deemed to have
been employees of Newco as of their actual employment
commencement date with the Corporation, however, for purposes of
this Section 4.8, in no event shall such date be deemed to be
less than one (1) year prior to the Closing Date nor shall any
employee be deemed to have been employed by the Corporation for
more than five (5) years.
4.9 Confidentiality. The parties to this Agreement will each
hold, and will use its best efforts to cause its respective
officers, directors, employees, consultants, advisors and agents
to hold, in confidence, unless compelled to disclose by judicial
or administrative process or by other requirements of law, all
confidential documents and information concerning the
Corporation, Newco and DHT furnished in connection with the
transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by such party, (ii)
in the public domain through no fault of any party hereto, or
(iii) later lawfully acquired by a party hereto from sources
other than a party hereto, provided that any party hereto may
disclose such information to its officers, directors, employees,
consultants, advisors and agents, lenders and other investors in
connection with the transactions contemplated by this Agreement
so long as such persons are informed by such party of the
confidential nature of such information and are directed by such
party to treat such information confidentially. The obligation
of each party hereto to hold any such information in confidence
shall be satisfied if it exercises the same care with respect to
such information as it would take to
<PAGE>
preserve the confidentiality of its own similar information. If this
Agreement is terminated, such confidences shall be maintained
and each party hereto will, and will use its best efforts to
cause its officers, directors, employees, consultants, advisors
and agents to, destroy or deliver upon request, all documents
and other materials, and all copies thereof, obtained by such
party or on its behalf from such other party hereto in
connection with this Agreement that are subject to such
confidence.
4.10 No Solicitation. In consideration of the efforts and
expenses incurred by Newco and DHT to effect the consummation of
the transactions contemplated herein, the Corporation covenants
and agrees that from the date hereof, it shall not initiate,
solicit or seek, directly or indirectly, by any means or in any
form or manner whatsoever, to enter any transaction with a third
party which may result in the sale of all or substantially all
of its assets, the sale of its capital stock, its merger with or
into another entity or any business combination. Furthermore,
the Corporation agrees that in the event, not as a result of its
solicitation or initiation, it engages discussions or
negotiations, oral or written, with a third party to engage in a
transaction which may result in the sale of all or substantially
all of its assets, the sale of its capital stock, its merger
with or into another entity or any other business combination,
it shall immediately notify Newco and keep Newco apprised of the
progress of such discussions and/or negotiations, and shall
promptly provide Newco true, correct and complete copies of all
correspondence and documents related thereto.
4.11 Covenants of the Corporation. Sections 4.1, 4.2, 4.3 and
4.8 are solely the responsibility of the Corporation.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to the Obligations of Newco. The
obligation of Newco to complete the transactions contemplated by
this Agreement shall be subject to the fulfillment at or prior
to the Closing of each of the following conditions:
(a) Representations True at Closing. The representations and
warranties of the Corporation and NCS contained in this
Agreement and all schedules attached hereto, shall be true and
correct in all material respects at and as of the date hereof
and they shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as
though made at and as of that time.
(b) Compliance with Conditions of Agreement. The Corporation
and NCS shall have performed and complied in all material
respects with all material obligations required by this
Agreement as a condition precedent to Closing.
(c) Lack of Material Adverse Change. There shall not have
been any material adverse change in the condition, financial or
otherwise, of the Corporations business or in the ability to
continue to conduct the business in the usual and ordinary
course.
(d) Compliance Certificate from Corporation. The President of
the Corporation, shall deliver to Newco at the Closing a
certificate confirming the matters specified in Sections 5.1(a)
and (b) as they relate to the Corporation.
(e) Board and Shareholder Approval. The Board of Directors
and shareholders of the Corporation shall have approved the
Merger, Agreement of Merger, this Agreement and the transactions
contemplated hereby.
(f) Secretary's Certificate from Corporation. A certificate,
dated as of the Closing Date, of the Secretary of the
Corporation certifying that: (i) attached is a true and correct
copy of the Articles of Incorporation and Bylaws of the
Corporation as then in effect; (ii) attached is a true and
correct copy and the
<PAGE>
resolutions adopted by the Board of
Directors and shareholders of the Corporation approving the
Merger, Merger Agreement, this Agreement and the transactions
contemplated hereby; and (iii) to the incumbency and specimen
signatures of each officer of the Corporation executing this
Agreement and the other agreements and certificates contemplated
thereby.
(g) Secretary's Certificate from NCS. A certificate, dated as
of the Closing Date, of the Secretary of NCS certifying that (i)
this Agreement and the transactions contemplated hereby have
been duly authorized by NCS and (ii) to the incumbency and
specimen signatures of each officer of NCS executing this
Agreement and the other agreements and certificates contemplated
hereby.
(h) Compliance Certificate from NCS. An officer of NCS shall
deliver to Newco at Closing a certificate confirming the matters
specified in Sections 5.1(a) and (b) as they relate to NCS.
(i) Opinion of Counsel. Newco shall have received from
Lindquist and Vennum, PLLP, counsel for NCS and Corporation, an
opinion, dated as of the Closing, in the form attached hereto as
Exhibit "C."
(j) Information. Newco shall have received all information
reasonably requested by it relating to the business of the
Corporation.
(k) Employee Benefit Plans. The Corporation shall have
arranged to have terminated all employee benefit plans of any
kind or nature, and any and all rights or obligations relating
thereto, simultaneous with the Closing or as soon thereafter as
practicable except with respect to the Corporation's 401(K) plan
and Employee Stock Ownership Plan in connection with which all
benefits thereunder shall be frozen prior to the Closing Date.
(l) Service Agreement. The Service Agreement, effective June
1, 1994, between the NCS and the Corporation, and all right and
obligations relating thereto, shall be terminated.
(m) Security Interest. NCS shall have terminated all security
interests relating to the Corporation's assets, tangible or
intangible, and filed all appropriate termination statements
with filing offices.
(n) General Assignment. NCS shall deliver to Newco a general
assignment in a form reasonably satisfactory to Newco and NCS
counsel with respect to any interest it may have in the
Corporation's patents, patent applications, trademarks,
tradenames, service marks or Software. The general assignment
shall not include any trademarks, tradenames or service marks
identifying or referring to NCS or its business.
(o) Absence of Litigation or Claim. Neither Corporation or
NCS shall have become aware or received notice of any
threatened, pending or commenced litigation, arbitration,
administrative hearing or investigation, termination of any
material contract, or other action seeking to prevent, or having
a potential material detrimental effect upon Newco in connection
with, the consummation of the transactions contemplated by this
Agreement, nor shall such action(s) have been pending, commenced
or threatened.
(p) All Proceedings to be Satisfactory. All corporate and
other proceedings to be taken by the Corporation in connection
with the transactions contemplate by this Agreement and all
documents incident thereto shall be reasonably satisfactory in
form and substance to Newco and its counsel, and Newco and its
counsel shall have received all such counterpart originals or
certified or other copies of such documents as they reasonably
may request.
(q) Consents. Corporation shall have obtained all material
consents required to be obtained by it in connection with the
consummation of the transactions contemplated by this Agreement.
<PAGE>
5.2 Conditions Precedent to Obligations of Corporation and NCS.
The obligation of Corporation and NCS to consummate the
transactions contemplated herein shall be subject to the
fulfillment at or prior to the Closing of each of the following
conditions:
(a) Representations True at Closing. The representations and
warranties of Newco contained in this Agreement shall be true
and correct in all material respects at and as of the date
hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and
effect as though made at and as of that time. Newco shall have
performed and complied with all of its obligations required by
this Agreement to be performed or complied with at or prior to
the Closing.
(b) Compliance with Conditions of Agreement. Newco shall have
performed and complied in all material respects with its
obligations required by this Agreement.
(c) Norwest Bank. Newco or DHT shall have entered into an
agreement with Norwest Bank ("Bank") with respect to that
certain Line of Credit between the Corporation, as maker, and
the Bank, as payee, upon terms satisfactory to NCS, whereby the
Bank shall release and hold harmless the NCS under its guarantee
of such Letter of Credit. Newco agrees to pay down the amount
outstanding under the Letter of Credit if necessary to release
and hold harmless the NCS from such guarantee.
(d) Lease Commitment. Newco or DHT shall have entered into
agreements with certain parties to assume the customer and bank
lease commitments set forth on Schedule 5.2(d), upon terms
satisfactory to NCS, relating to representations and warranties
on agreements between the Corporation and its customers and
leasing company whereby NCS is currently the guarantor.
(e) Promissory Note. Newco or DHT shall have paid to NCS the
balance outstanding at time of Closing, in satisfaction of all
amounts due under that certain promissory note dated March 31,
1995 by and between the Corporation, as maker, and NCS, as payee.
(f) Opinion of Counsel. Corporation and NCS shall have
received from Cohen, Berke, Bernstein, Brodie, Kondell & Laszlo,
P.A., counsel for Newco, an opinion, dated as of the Closing, in
the form attached hereto as Exhibit "D."
(g) Customer Support Agreements. Newco or DHT shall have used
its best efforts to assume the customer standby support
agreements between NCS and customers of the Corporation listed
on Schedule 5.2(d) hereto.
(h) Compliance Certificate from Newco. The President of Newco
shall deliver to the Corporation and NCS at the Closing a
certificate confirming the matters specified in Sections 5.2(a)
and (b).
(i) Secretary's Certificate from Newco. A certificate, dated
as of the Closing Date, of the Secretary of Newco certifying
that: (i) attached is a true and correct copy of the Articles
of Incorporation and Bylaws of Newco as then in effect; (ii)
attached is a true and correct copy and the resolutions adopted
by the Board of Directors and shareholders of Newco approving
the Merger, Merger Agreement, this Agreement and the
transactions contemplated hereby; and (iii) to the incumbency
and specimen signatures of each officer of Newco, executing this
Agreement and the other agreements and certificates contemplated
hereby.
(j) Absence of Litigation or Claim. Newco shall not have
become aware or received notice of any threatened, pending or
commenced litigation, arbitration, administrative hearing or
investigation, termination of any material contract, or other
action seeking to prevent, or having a potential detrimental
effect upon the Corporation or NCS in connection with, the
consummation of the transactions contemplated by this Agreement,
nor shall such action(s) have been pending, commenced or
threatened.
<PAGE>
(k) All Proceedings to be Satisfactory. All corporate and
other proceedings to be taken by Newco in connection with the
transactions contemplated by this Agreement and all documents
incident thereto shall be reasonably satisfactory in form and
substance to the Corporation, NCS and their respective counsel,
and the Corporation, NCS and their respective counsel shall have
received all such counterpart originals or certified or other
copies of such documents as they reasonably may request.
(l) Fairness Opinion and Shareholders Approval. The fairness
opinion of John G. Kinnard and Company, Inc. shall be
satisfactorily updated concurrent with mailing the proxy
material to the shareholders and the shareholders of the
Corporation shall have duly approved the Merger.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification.
(a) Subject to subsection (d) below, NCS shall indemnify Newco
and hold it harmless against any loss, liability, damage,
deficiency or expense (including reasonable legal expenses and
costs as incurred) (collectively, "Losses") which Newco may
suffer, sustain or become subject to, directly or indirectly, as
a result of or in connection with the breach or inaccuracy by
NCS of its representations or warranties contained in Section
3.2 of this Agreement. With respect to claims for breaches of
representations or warranties contained in this Agreement, or in
any agreement relating to or contemplated hereby, NCS shall be
liable with respect to any Losses regardless of when finally
ascertained, provided written notice is given by Newco pursuant
toParagraph(d) below. Notwithstanding the foregoing, the
representations and warranties of NCS and the indemnification
obligation of NCS contained in this Agreement shall terminate
and expire six (6) months from the Closing Date. Furthermore,
the maximum aggregate amount which NCS may be liable for
pursuant to its indemnification obligation contained in this
Agreement shall be $355,000.
(b) Subject to subsection (d) below, Newco shall indemnify the
Corporation and NCS and hold them harmless against any Losses
which they may suffer, sustain or become subject to, as the
result of or in connection with (i) the breach by Newco of any
representation or warranty of Newco contained in this Agreement,
or in any agreement relating to or contemplated hereby, or (ii)
the breach by Newco of any covenant or agreement of Newco
contained in this Agreement or in any agreement relating to or
contemplated hereby. With respect to claims for breaches of
representation and warranties contained in this Agreement, or in
any agreement relating to or contemplated hereby, Newco will be
liable with respect to any Losses, regardless of when finally
ascertained, if written notice of a claim for such breach is
given by Corporation or NCS to Newco pursuant to paragraph (c)
below.
(c) Subject to subsection (d) below, Newco and DHT shall
indemnify NCS and hold it harmless against any Losses (including
without limitation, any cost or expenses associated with
performance of standby support obligations) which it may suffer,
sustain, incur or become subject to, as a result of or in
connection with, any claim, demand or other requirement made or
asserted against NCS from and after the Closing Date, under,
pursuant to or arising out of any standby support agreement or
other similar agreement between NCS and any customer of the
Corporation, as listed on Schedule 5.2(d) hereto, pursuant to
which NCS guarantees, agrees to provide for or agrees to perform
in place of, the performance of the Corporation, (collectively,
"Standby Support Agreements"). Notwithstanding subsection (d)
below, NCS shall be entitled at its option, but not obligated,
to perform the requirements of any Standby Support Agreement,
upon customer demand until and unless Newco provides performance
which is satisfactory to the customer as confirmed by the
customer in writing, and all expense of such performance, if
any, in addition to any other Losses resulting from such claim,
shall be subject to the indemnity provided in this Section
6.1(c).
(d) Any party making a claim for indemnification under this
Section 6.1 (an "Indemnitee") shall notify the indemnifying
party (an "Indemnitor") of the claim in writing promptly after
discovering the claim
<PAGE>
or receiving written notice of a claim
against it (if by a third party), describing the claim, the
amount thereof (if known and quantifiable), and the basis
thereof. Any claim for indemnification under this Section 6.1
to the extent such claim can be reasonably quantified, must be
for a minimum amount of $15,000 or when the amount of such claim
is aggregated with other claims for indemnification brought
under this Section 6.1 equals or exceeds $15,000. An Indemnitor
shall be entitled to participate in the defense of such action
at its expense, and at its option (subject to the limitations
set forth below) shall be entitled to assume control of such
defense with reputable counsel; provided, that prior to
Indemnitor assuming control of such defense it or they shall
first verify to the Indemnitee in writing that such Indemnitor
shall be fully responsible for such claim and that it will
provide the full indemnification required hereunder to
Indemnitee with respect to such claim, including payment thereof
and performance thereunder; and provided further, that:
(i) The Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for
such purpose, the fees and expenses of such separate counsel
which shall be borne by Indemnitee. Notwithstanding the
foregoing, the fees and expensesof such separate counsel
incurred prior to the date the Indemnitor's counsel effectively
assumes control of such defense shall be borne by the
Indemnitor; and
(ii) The Indemnitee shall be entitled to assume control of
such defense and shall bear the fees and expenses of counsel
retained by the Indemnitor if, upon petition by Indemnitee, the
appropriate court rules that the Indemnitor failed or is failing
to vigorously prosecute or defend such claim; and
(iii) The Indemnitor shall not be entitled to control the
defense of any claim to the extent that the claim seeks an
injunction or equitable relief against Indemnitee which, if
successful, could materially interfere with the business of the
Indemnitee. If the Indemnitor, with the consent of the
Indemnitee, shall control the defense of any such claim, the
Indemnitor shall obtain the prior written consent of the
Indemnitee (which shall not be unreasonably withheld) before
entering into any settlement of a claim or ceasing to defend
such claim, if pursuant to or as a result of such settlement or
cessation, injunction or other equitable relief will be imposed
against the Indemnitee.
(iv) If the claim is the result of an asserted breach of any
warranty, representation or covenant, and such claim is
material, then the costs of defense of such claim shall be borne
by the Indemnitor on a current basis if so requested by
Indemnitee.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Survival of Representations and Warranties. Unless limited
herein to the contrary, all representations, warranties,
covenants and other agreements contained herein or appended
hereto shall survive the execution and delivery of this
agreement and the Closing, irrespective of any investigation
made by or on behalf of either party.
7.2 Notices. All notices which are permitted or required under
this Agreement shall be in writing and delivered personally or
by certified mail, postage prepaid, addressed as follows, or to
such other person or address as may be designated by written
notice by one party to another:
If to Newco: DMI ACQUISITION CORP.
101 Southhall Lane, Suite 210
Maitland, Florida 32751
Attn: Mitchel J. Laskey, President
<PAGE>
<PAGE>
With a copy to: Richard N. Bernstein, Esq.
Cohen, Berke, Bernstein,
Brodie, Kondell & Laszlo, P.A.
Terremark Centre, 19th Floor
2601 South Bayshore Drive
Miami, Florida 33133
If to DHT: Dynamic Healthcare Technologies, Inc.
101 Southhall Lane, Suite 210
Maitland, Florida 32751
Attn: Mitchel J. Laskey, President
With a copy to: Richard N. Bernstein, Esq.
Cohen, Berke, Bernstein,
Brodie, Kondell & Laszlo, P.A.
Terremark Centre, 19th Floor
2601 South Bayshore Drive
Miami, Florida 33133
If to Corporation: DIMENSIONAL MEDICINE, INC.
10901 Bren Road East
Minnesota, MN 55343
Attn: John Paumen, President
With a Copy to: John Houston, Esq.
Lindquist & Vennum, P.L.L.P.
4200 IDS Center
Minneapolis, MN 55402
If to NCS: NATIONAL COMPUTER SYSTEMS, INC.
11000 Prairie Lakes Drive
Eden Prairie, Minnesota 55354
Attn: Ms. Adrienne Tietz
With a Copy to: Mr. Michael C. Brewer, Esq.
National Computer Systems, Inc.
11000 Prairie Lakes Drive
Eden Prairie, Minnesota 55354
Notices shall be deemed delivered when delivered personally or
when mailed by prepaid certified or registered mail with return
receipt requested, or air courier which provides for evidence of
delivery.
The addresses set forth above shall be conclusive for all
purposes unless and until written notice of a change of address
shall be sent to the parties herein.
7.3 Notification of Certain Matters. Corporation and NCS shall
give prompt notice to Newco of:
(a) any notice of, or other written communication relating to,
any default or event which with notice or lapse of time or both,
would become a default, received by Corporation, NCS or any
affiliate, subsequent to the date of this Agreement and prior to
the date of closing, under any contract, agreement or instrument
to which Corporation is a party;
<PAGE>
(b) any notice or other communication from any third party
alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by
this Agreement;
(c) any written communication from any third party, or any
oral communication from any third party which Corporation or NCS
reasonably believes is the precursor of a written communication
challenging the legality or fairness of this Agreement or
threatening any action or proceeding in respect to this
Agreement with a view to preventing the consummation of this
transaction; and
(d) the occurrence of any event or the failure of any event to
occur that results in a breach of any representation or warranty
of Corporation or NCS or a failure of Corporation or NCS to
comply with any covenant, condition or agreement contained
herein.
(e) Any notice of the exercise of dissenter's rights by any
Corporation stockholder.
7.4 Termination. This Agreement may be terminated and the
Merger may be abandoned at anytime prior to the Closing
(notwithstanding any approval of this Agreement by the
shareholders of the Corporation):
(a) by mutual written consent of the Corporation and Newco;
(b) by either the Corporation or Newco, if there has been a
material misrepresentation, material breach of warranty or
violation of any material covenant on the part of the other
party in the representations, warranties and covenants contained
herein;
(c) by either the Corporation or Newco, if the Closing has not
occurred by May 15, 1996; provided that no party may terminate
this Agreement pursuant to this clause if such party's failure
to fulfill any of its obligations under this Agreement shall
have been the reason the Closing shall not have occurred on or
before said date;
(d) by either the Corporation or Newco, if there shall be any
law or regulation that makes consummation of the Merger illegal
or otherwise prohibited or if any judgment, injunction, order or
decree enjoining the Corporation or Newco from consummating the
Merger is entered and such judgment, injunction, order or decree
shall become final and non-appealable;
(e) by either the Corporation and Newco, if the Corporation's
shareholders shall have voted on and failed to adopt and approve
this Agreement and the Merger.
7.5 Knowledge. In the context of this Agreement, where the
standard of knowledge is applied with respect to any
representation or warranty on the part of the Corporation, this
shall mean the knowledge of John Paumen, Mark Holman or Adrienne
Tietz. In the context of this Agreement, where the standard of
knowledge is applied with respect to any representation or
warranty on the part of NCS, this shall mean the knowledge of
Adrienne Tietz.
7.6 No Assignment. This Agreement may not be assigned by
either party without the prior written consent of the other
party.
7.7 Severability. Any provision of this Agreement which is
invalid or unenforceable shall be ineffective to the extent of
such invalidity or unenforceability, without affecting in any
way the remaining provisions hereof.
7.8 Governing Law. This Agreement is deemed to have been made
in the State of Florida and its interpretations, its
construction and the remedies for its enforcement or breach are
to be applied pursuant to, and in accordance with, the laws of
the State of Florida for contracts made and to be performed in
that State.
<PAGE>
7.9 Schedules. It is acknowledged and agreed that all
schedules to this Agreement are an integral part hereof and are
incorporated, in total, by reference fully as a part of this
Agreement in all respects. Any schedule or exhibit which is not
attached hereto at the time of the execution of this Agreement
shall be exchanged at or prior to the time of Closing, and shall
be subject to review and approval by the parties hereto and
agreed to by them.
7.10 Incorporation and Amendment. This writing constitutes the
entire agreement of the parties superseding and extinguishing
all prior agreements or understandings, representations or
warranties, relating to the subject matter hereof. This
Agreement may not be modified, amended or terminated except by
written agreement specifically referring to this Agreement
signed by the parties hereto.
7.11 Remedies. Newco, and Corporation and NCS agree that any
dispute arising among the parties hereto shall be settled by a
court of competent jurisdiction in accordance with applicable
law and that the parties shall be free to petition the court for
all appropriate legal and/or equitable remedies inclusive of
specific performance and injunctive relief.
7.12 Waiver. No waiver of any breach or default hereunder
shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or
similar nature.
7.13 Headings. The paragraph headings contained herein are for
the purpose of convenience only and are not intended to define
or limit the contents of said paragraphs.
7.14 Further Action. Each party hereto shall take such further
action and shall execute and deliver such further documents as
may be reasonably requested by the other party in order to carry
out the provisions and purposes of this Agreement.
7.15 Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed
one original.
7.16 Venue. The parties hereto mutually agree that proper
venue with respect to any dispute arising hereunder, related
hereto and connected herewith shall be Seminole County, Florida.
7.17 Public Announcements. No party shall, without the prior
written consent from the other parties, issue any press release
or furnish any written statement to the Corporation's employees
or to the public concerning the transactions contemplated by
this Agreement.
[THE BOTTOM OF THIS PAGE INTENTIONALLY BLANK]
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the date first written above.
THE CORPORATION:
DIMENSIONAL MEDICINE INC.,
a Minnesota corporation
By: /S/JOHN P. PAUMEN
John P. Paumen, President
NCS:
NATIONAL COMPUTER SYSTEMS, INC.,
a Minnesota corporation
By: /S/ADRIENNE T. TIETZ
Adrienne T. Tietz, Vice President
NEWCO:
DMI ACQUISITION CORP.,
a Florida corporation
By: /S/MITCHEL J. LASKEY
Mitchel J. Laskey, President
DHT:
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.,
a Nebraska corporation
By: /S/MITCHEL J. LASKEY
Mitchel J. Laskey, President
<PAGE>
AMENDMENT
to that certain
Merger Agreement
by and among
DMI Acquisition Corp.,
Dynamic Healthcare Technologies, Inc.,
National Computer Systems, Inc.,
and
Dimensional Medicine, Inc.
dated February 5, 1996.
This Amendment is entered into effective as of March 26, 1996,
by and among DMI ACQUISITION CORP., a Florida corporation
("Newco"), DYNAMIC HEALTHCARE TECHNOLOGIES, INC., a Nebraska
corporation ("DHT"), NATIONAL COMPUTER SYSTEMS, INC., a
Minnesota corporation ("NCS") and DIMENSIONAL MEDICINE, INC., a
Minnesota corporation (the "Corporation") for the purpose of
amending the Merger Agreement described above. The parties
respectively acknowledge the receipt and sufficiency of the
consideration for this Amendment and that it is binding,
enforceable and modifies the Merger Agreement as contemplated by
Section 7.10 therein.
I. The text of Section 5.2(d) of the Merger Agreement is deleted
in its entirety and the following is substituted: "[Reserved.]"
II. The text of Section 6.1(c) of the Merger Agreement is
deleted in its entirety and the following is substituted:
"Subject to subsection (d) below, Newco and DHT shall indemnify
NCS and hold it harmless against any Losses (including without
limitation, any cost or expenses associated with performance of
lease or standby support obligations) which it may suffer,
sustain, incur or become subject to, as a result of or in
connection with, any claim, demand or other requirement made or
asserted against NCS from and after the Closing Date, under,
pursuant to or arising out of: (i) any standby support
agreement or other similar agreement between NCS and any
customer of the Corporation, as listed on Schedule 5.2(d)
hereto, pursuant to which NCS guarantees, agrees to provide for
or agrees to perform in place of, the performance of the
Corporation, (collectively, "Standby Support Agreements"), or
(ii) any guarantees listed under the heading "Lease Guarantees"
on Schedule 5.2(d) hereto. Notwithstanding subsection (d)
below, NCS shall be entitled at its option, but not obligated,
to perform the requirements of any Standby Support Agreement,
upon customer demand until and unless Newco provides performance
which is satisfactory to the customer as confirmed by the
customer in writing, and all expense of such performance, if
any, in addition to any other Losses resulting from such claim,
shall be subject to the indemnity provided in this Section
6.1(c)."
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the date first written above.
THE CORPORATION:
DIMENSIONAL MEDICINE, INC.,
a Minnesota corporation
By: /S/JOHN P. PAUMEN
John P. Paumen, President
NCS:
NATIONAL COMPUTER SYSTEMS, INC.,
a Minnesota corporation
By: /S/ADRIENNE T. TIETZ
Adrienne T. Tietz, Vice President
DHT:
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.,
a Nebraska corporation
By: /S/MITCHEL J. LASKEY
Mitchel J. Laskey, President
NEWCO:
DMI ACQUISITION CORP.,
a Florida corporation
By: /S/MITCHEL J. LASKEY
Mitchel J. Laskey
<PAGE>
AMENDMENT NO. 2
to that certain Merger Agreement
By and among DMI Acquisition Corp.,
Dynamic Healthcare Technologies, Inc.,
National Computer Systems, Inc.
and
Dimensional Medicine, Inc.
dated February 5, 1996
and amended as of March 26, 1996.
This Amendment is entered into effective as of May 1, 1996 by
and among DMI ACQUISITION CORP., a Florida corporation
("Newco"), DYNAMIC HEALTHCARE TECHNOLOGIES, INC., a Nebraska
corporation ("DHT"), NATIONAL COMPUTER SYSTEMS, INC., a
Minnesota corporation ("NCS") and DIMENSIONAL MEDICINE, INC., a
Minnesota corporation ("DMI") for the purpose of amending the
Merger Agreement described above. The parties respectively
acknowledge the receipt and sufficiency of the consideration for
this Amendment and that it is binding, enforceable and modifies
the Merger Agreement as contemplated by Section 7.10 therein.
I. The text of Section 5.2(e) is deleted in its entirety and the
following is substituted:
"The amount outstanding under that certain Promissory Note
dated March 31, 1995 by and between the Corporation, as maker,
and NCS, as payee, as of May 1, 1996 is $541,938.00 plus accrued
interest of $2,762.00. Newco shall, as of the Closing, have
paid to NCS $294,745.00 and shall have executed and delivered to
NCS a Promissory Note in the form of Exhibit A hereto committing
to pay NCS $250,000 on or before July 1, 1996, provided that the
amount outstanding shall be due and payable immediately if Newco
has not provided NCS on or prior to June 15, 1996 a letter which
evidences Newco's ability to satisfy the obligation incurred
under the Promissory Note by July 1, 1996. The Promissory Note
shall bear interest at the rate of 8.25% per annum, shall be
fully secured pursuant to a security agreement in the form
attached hereto as Exhibit B and Newco shall operate in
accordance with a lockbox arrangement in the form attached
hereto as Exhibit C."
II. The text of Section 5.1(m) of the Merger Agreement is
deleted in its entirety and the following is substituted:
"[Reserved]."
III. The text of Section 4.7 of the Merger Agreement is deleted
in its entirety and the following is substituted:
"At the closing, NCS shall deliver its check in the amount of
$63,964.00 to Newco in full satisfaction of amounts due by NCS
to the Corporation for the period ending January 31, 1996
pursuant to the Tax Sharing Agreement effective as of December
20, 1993. The remainder owed pursuant to the Tax Sharing
Agreement which is associated with NCS's tax year ending January
31, 1997 shall be paid upon NCS's filing of its tax return for
the fiscal year ending January 31, 1997."
IV. At the closing, NCS shall pay to Lindquist & Vennum, counsel
to DMI, all legal fees due to be paid by DMI to Lindquist &
Vennum as of May 1, 1996 in an amount not to exceed $52,000, and
shall be reimbursed from funds deposited with DMI in accordance
with the lockbox arrangement described above. NCS shall be
entitled to retain from the first funds received in the lockbox
following the Closing such amount as is necessary to satisfy the
amount paid to Lindquist & Vennum.
V. All terms and conditions of the Merger Agreement not
specifically amended hereby shall remain in full force and
effect.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the date first written above.
DIMENSIONAL MEDICINE, INC.
By: /S/MARK HOLMAN
Mark Holman, Chief Financial Officer
and Secretary
NATIONAL COMPUTER SYSTEMS, INC.
By: /S/ADRIENNE T. TIETZ
Adrienne T. Tietz, Vice President
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
By: /S/DAVID M. POMERANCE
Its: CEO
DMI ACQUISITION CORP.
By: /S/DAVID M. POMERANCE
David M. Pomerance, Secretary
<PAGE>
ARTICLES OF MERGER AND AGREEMENT AND
PLAN OF MERGER
This Articles of Merger and Agreement and Plan of Merger
("Agreement of Merger") is made as of April 29, 1996 by and
between DMI Acquisition Corp., a Florida corporation (the
"Surviving Corporation"), and Dimensional Medicine, Inc., a
Minnesota corporation ("DMI"). The Surviving Corporation and
DMI are sometimes hereinafter collectively referred to as
"Constituent Corporations".
W I T N E S S E T H:
WHEREAS, the Surviving Corporation is corporation duly
organized and existing under the laws of the State of Florida
and, as of the date hereof, the authorized capital stock of the
Surviving Corporation consists of 10,000 shares of common stock,
$.01 par value, of which one hundred (100) shares are issued and
outstanding;
WHEREAS, DMI is a corporation duly organized and existing under
the laws of the State of Minnesota and, as of the date hereof,
the authorized capital stock of DMI consists of 50,000,000
shares of common stock, $.15 par value per share ("DMI Common
Stock"), of which 32,533,460 shares are issued and outstanding;
WHEREAS, the Surviving Corporation, DMI and certain
shareholders of DMI have entered into a certain Merger Agreement
dated as of February 5, 1996, as amended, (the "Merger
Agreement"), which sets forth certain representations,
warranties, covenants and other agreements in connection with
the transactions therein and herein contemplated and which
contemplates the merger (the "Merger") of DMI with and into the
Surviving Corporation in accordance with this Agreement of
Merger; and
WHEREAS, the Boards of Directors of each of the Constituent
Corporations deem the Merger advisable and in the best interests
of each such corporation and their respective shareholders, and
the Boards of Directors of each of the Constituent Corporations
and the shareholders of each of the Constituent Corporations
have adopted and approved the Merger Agreement and this
Agreement of Merger in accordance with the laws of their
respective States of incorporation.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
1. The Merger. Upon the terms and subject to the conditions
set forth herein and in the Merger Agreement, DMI shall be
merged with and into the Surviving Corporation effective as
of11:59 p.m. Central Standard Time on May 1, 1996. Such time
shall be referred to as the "Effective Time," and the "Effective
Date" of the Merger shall be the date of the Effective Time. On
or about the Effective Date, the Constituent Corporations shall
file with the Secretary of State of the State of Minnesota
articles of merger prepared and executed in accordance with
Section 302A.615 of the Minnesota Statutes, together with such
other agreements and documents required to be filed by a foreign
surviving corporation pursuant to Section 302A.615(4) and
otherwise. As of the Effective Date, the separate corporate
existence of DMI shall cease and the Surviving Corporation shall
be the surviving corporation of the Merger. The separate
corporate existence of the Surviving Corporation shall continue
unaffected and unimpaired by the Merger.
<PAGE>
ARTICLE 2
2.1 Articles of Incorporation. The Articles of Incorporation
of the Surviving Corporation, as in effect immediately prior to
the Effective Time, shall remain in effect and be the Articles
of Incorporation of the Surviving Corporation at and after the
Effective Time until duly amended in accordance with the FBCA.
2.2 Bylaws. The Bylaws of the Surviving Corporation, as in
effect immediately prior to the Effective Time, shall remain in
effect and be the Bylaws of the Surviving Corporation at and
after the Effective Time until duly amended in accordance with
such Bylaws and applicable law.
ARTICLE 3
3.1 Exchange and Cancellation of Securities in the Merger. At
the Effective Time:
3.1.1 Each share of the common stock of the Surviving
Corporation that is issued and outstanding immediately prior to
the Effective Time shall remain issued and outstanding
thereafter and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
3.1.2 Each share of DMI Common Stock which constitutes
treasury stock immediately prior to the Effective Time shall be
canceled immediately prior to the Effective Time.
3.1.3 Each holder of issued and outstanding shares of DMI
Common Stock which are outstanding immediately prior to the
Effective Time shall exchange all of his, her or its shares of
DMI Common Stock for cash and/or other consideration to which
such holder is entitled pursuant to the terms and conditions set
forth in the Merger Agreement, subject to the rights of
dissenting shareholders pursuant to Section 302A.471 of the
Minnesota Statutes. The procedures regarding the assertion of
dissenters' rights shall be conducted in accordance with Section
302A.473 of the Minnesota Statutes.
3.1.4 Each and every share of DMI Common Stock and other
capital stock of DMI, if any, and any and all options, warrants,
securities and/or other rights to directly or indirectly
acquire,whether of record or beneficially, shares of DMI Common
Stock and/or other capital stock, securities, equity interests
or profit participation rights with respect to DMI, whether or
not vested, which prior to the Effective Date are issued or
outstanding, shall be canceled, terminated and of no further
force or effect.
3.2 Surrender and Payment.
3.2.1 As soon as practicable after the Effective Date, a
letter of transmittal and instructions will be mailed or
otherwise made available for use in surrendering to Norwest Bank
Minnesota, N.A. (the "Exchange Agent") stock certificates which
immediately prior to the Effective Date represented shares of
DMI Common Stock. Each holder of record of a stock certificate
(a "Certificate") entitled to be exchanged as set forth in
Section 3.1.3 (other than holders who properly exercise rights
of dissenting shareholders under Minnesota law) will be entitled
to receive, upon proper surrender thereof to the Exchange Agent,
together with a properly completed and duly executed letter of
transmittal, the cash and/or other consideration as described in
Section 3.1.3. Until so surrendered, each Certificate shall be
deemed for all corporate purposes to evidence only the right to
receive upon proper surrender (together with a properly
completed and duly executed letter of transmittal) the cash
and/or other consideration into which the holder thereof may
exchange same.
3.2.2 Upon the Effective Time, the stock transfer books of DMI
shall be closed and no transfer of shares of DMI Common Stock
shall thereafter be made. Any cash or other consideration
deposited with the Exchange Agent for the benefit of the holders
of Certificates which remain unclaimed after the expiration of
one year after the Effective Date shall be delivered to the
Surviving Corporation by the Exchange Agent and, thereafter, the
Exchange Agent shall not be liable to any person claiming the
same. No interest shall accrue or be payable to or for the
benefit of such holders with respect to any cash or other
consideration held by the Exchange
<PAGE>
Agent or the Surviving
Corporation. After the return to the Surviving Corporation by
the Exchange Agent of unclaimed cash or other consideration, the
Surviving Corporation shall, upon surrender to it of a
Certificate, deliver to the holder thereof the cash and/or other
consideration to which said holder shall be entitled pursuant to
Section 3.1.3 hereof.
3.2.3 If any cash or other consideration is to be paid to a
person other than the registered holder of the Certificate
surrendered in exchange therefor, it shall be a condition of the
payment thereof that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and
that the person requesting such exchange shall pay to the
Exchange Agent any transfer or other taxes required by virtue of
the payment of said consideration to a person other than the
registered holder of the Certificate surrendered.
ARTICLE 4
4.1 Effect of Merger. When the Merger has been effected:
4.1.1 The separate existence of DMI shall cease and the
corporate existence and corporate identity of the Surviving
Corporation shall continue as the surviving corporation of the
Merger.
4.1.2 The Surviving Corporation shall have the rights,
privileges, immunities and powers, and shall be subject to all
of the duties and liabilities, of a corporation under the FBCA.
4.1.3 The Surviving Corporation shall possess all of the
rights, privileges, immunities and franchises, of a public as
well as a private nature, of DMI, and all property, real
(immovable), personal (movable), intangible and mixed, and all
debts due on whatever accounts, including subscriptions to
shares, and all other choses of action, and all and every other
interest belonging to DMI, shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without
act or deed.
4.1.4 The Surviving Corporation shall be responsible and
liable for all liabilities and obligations of DMI, and any claim
existing or action or proceeding pending by or threatened
against DMI may be prosecuted as if the Merger had not taken
place, and the Surviving Corporation may be substituted in its
place. Neither the rights of creditors nor liens upon the
property of DMI shall be impaired by the Merger.
ARTICLE 5
5.1 Counterparts. This Agreement of Merger may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one
agreement.
5.2 Dates of Shareholder Approval. This Articles of Merger and
Agreement and Plan of Merger, the Merger Agreement and the
Merger were duly approved and adopted by (i) unanimous written
consent of the sole shareholder of the Surviving Corporation
dated as of April 29, 1996, and (ii) a majority of the
shareholders of DMI pursuant to a special meeting of the
shareholders of DMI held on April 29, 1996.
5.3 Dates of Board of Director Approval. This Articles of
Merger and Agreement and Plan of Merger, the Merger Agreement
and the Merger were duly approved and adopted by (i) unanimous
written consent of the Board of Directors of the Surviving
Corporation dated as of February 5, 1996, and (ii) unanimous
vote of the Board of Directors of DMI at a meeting held on April
29, 1996.
<PAGE>
IN WITNESS WHEREOF, each of the Constituent Corporations have
caused this Agreement of Merger to be executed by their
respective officers hereunto duly authorized, all as of the date
first above written.
ATTEST: DMI ACQUISITION CORP., a Florida
corporation
By: /S/DAVID M. POMERANCE By: /S/MITCHEL J. LASKEY
Name: David M. Pomerance Name: Mitchel J. Laskey
Title: Secretary Title: President
ATTEST: DIMENSIONAL MEDICINE, INC.,
a Minnesota corporation
By: /S/MARK HOLMAN By: /S/JOHN P. PAUMEN
Name: Mark Holman Name: John P. Paumen
Title: Secretary Title: President
<PAGE>
<PAGE>
CERTIFICATE OF THE SECRETARY
OF
DMI ACQUISITION CORP.
I, DAVID M. POMERANCE, Secretary of DMI Acquisition Corp., a
Florida corporation (the "Corporation"), hereby certify that:
1. The Articles of Merger and Agreement and Plan of Merger to
which this Certificate is attached has been duly executed on
behalf of the Corporation by its President and Secretary under
the corporate seal of the Corporation.
2. The Articles of Merger and Agreement and Plan of Merger was
approved and adopted by unanimous written consent of sole
shareholder of the Corporation dated as of April 29, 1996.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of April 29, 1996.
/S/DAVID M. POMERANCE
David M. Pomerance, Secretary
<PAGE>
<PAGE>
CERTIFICATE OF THE SECRETARY
OF
DIMENSIONAL MEDICINE, INC.
I, MARK HOLMAN, Secretary of Dimensional Medicine, Inc., a
Minnesota corporation (the "Corporation"), hereby certify that:
The Articles of Merger and Agreement and Plan of Merger to
which this Certificate is attached has been duly executed on
behalf of the Corporation by its President and Secretary under
the corporate seal of the Corporation.
The Articles of Merger and Agreement and Plan of Merger was
approved and adopted by a vote of a majority of the shareholders
of the Corporation pursuant to a special meeting of the
shareholders held on April 29, 1996.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of April 29, 1996.
/S/MARK HOLMAN
Mark Holman, Secretary
