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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended January 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-16288
FISHER BUSINESS SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Georgia 58-1366235
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1950 Spectrum Circle, Suite 400
Marietta, Georgia 30067
(770) 857-4461
(Address of principal executive offices,
including zip code, and telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common Stock, $.01
par value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained herein, and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
Revenues for the year ended January 31, 1996: $732,549
The aggregate market value of the Common Stock of the Registrant held by
nonaffiliates of the Registrant (approximately 4,466,486 shares) on March 15,
1996 was approximately $7,280,372. The aggregate market value was computed by
reference to the average of the bid and asked prices of the Common Stock on
March 15, 1996. For the purposes of this response, officers, directors and
holders of 5% or more of the Registrant's Common Stock are considered to be
affiliates of the Registrant at that date.
The number of shares outstanding of the Registrant's Common Stock as of
April 23, 1996 was 7,363,696 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (check one):
Yes No X
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PART I
ITEM 1. BUSINESS
GENERAL
The Company designs, develops, markets, licenses and supports proprietary
computer software for use in a variety of food service establishments,
including the vertical market consisting of large restaurant chains. The
Company's Fisher Restaurant Management System(R) is a fully integrated
restaurant system. Utilizing the capability of enhanced personal computers in
a networking environment, the Fisher Restaurant Management System(R) is
designed to permit the integrated operation of both point-of-sale transaction
functions and management reporting functions. The Company's restaurant
software is designed to operate on IBM-compatible hardware, and the Company
markets its software systems as a hardware independent solution. The Company
will install its software on the customer's hardware of choice.
The Company's point-of-sale software system was introduced in September
1986 and was combined with the Company's previously developed financial and
accounting software to form the Company's first generation Fisher Restaurant
Management System(R). The Fisher Restaurant Management System(R) was first
developed on an enhanced IBM PC Model AT, but was modified in 1987 to run on
the IBM Personal System/2(TM) ("PS/2"). The Fisher Restaurant Management
System(R) is presently installed in approximately 1,500 restaurants. See
"-Products."
The second generation of the Fisher Restaurant Management System(R) is a
color touch screen system designed as an open system utilizing a popular fourth
generation programming language and a full function relational database. This
modular software system operates on a standard personal computer network and
embraces the business needs of restaurant servers, bartenders, cashiers and
managers, as well as the corporate information needs of the larger chain
restaurant organizations. The software modules include server entry, time and
attendance, and corporate communication.
The Company has embarked upon a strategy of strategic acquisitions to
position the Company to be a leading information technology company in the
healthcare and hospitality industries. In furtherance of this strategy, the
Company has agreed to merge AUBIS Hospitality Systems, Inc. ("AHS") and AUBIS
Systems Integration, Inc. ("ASI") (collectively, the "AUBIS Subsidiaries"),
each a wholly-owned subsidiary of AUBIS, L.L.C. ("AUBIS") with and into two
wholly-owned subsidiaries of the Company (collectively, the "Fisher
Subsidiaries"), pursuant to the Amended and Restated Agreement and Plan of
Merger and Reorganization, dated December 13, 1995 and amended and restated as
of March 29, 1996 (the "AUBIS Agreement"), among AUBIS, the AUBIS Subsidiaries,
certain affiliates of AUBIS, the Company and the Fisher Subsidiaries, in which
AUBIS will receive 10,500,000 shares of Common Stock of the Company (such
transaction referred to herein as the "AUBIS Transaction"). In addition, the
Company has entered into a Stock Purchase Agreement, dated as of March 29, 1996
(the "HALIS Agreement"), between the Company and HALIS, L.L.C. ("HALIS") and
its affiliates, providing for the acquisition by the Company of HALIS Software,
Inc. ("HSI"), a wholly-owned subsidiary of HALIS, in which HALIS will receive
5,000,000 shares of Common Stock of the Company (such transaction referred to
herein as the "HALIS Transaction"). The AUBIS and HALIS Transactions are
collectively referred to herein as the "Transactions." Consummation of the
Transactions is subject, among other things, to approval of the shareholders of
the Company at the 1996 Annual Meeting of Shareholders, scheduled to be held in
the summer of 1996. Upon consummation of the Transactions, AHS, ASI and
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HSI will be wholly-owned subsidiaries of the Company and the Company's
corporate name will be changed to AUBIS, Inc.
The Transactions will require the Company to issue an aggregate of
15,500,000 shares of Common Stock. The consideration to be paid by the Company
in the Transactions was determined through negotiations between management of
the Company and each of AUBIS and HALIS and was not based upon any independent
appraisal or valuation of either the Company, the AUBIS Subsidiaries or HSI.
Among the factors considered in making such determination were prevailing
market conditions and general economic conditions, the revenues and earnings of
the parties in recent periods, the relative experience of management of each of
the parties, estimates of the business potential of the combined companies, the
present state of development of each company and other factors deemed relevant.
The Company has not obtained an opinion of an independent financial advisor as
to the fairness of the Transactions to the shareholders of the Company from a
financial point of view.
AHS, formerly known as Wiporwil Systems, Inc., has provided value added
sales and services in the southeastern United States to individuals,
franchisees, management companies and national chains in the restaurant
industry since 1992. Its trained technical staff has experience in computer
based systems for restaurant point of sale ("POS") and back office
applications, restaurant management (both fine dining and fast food) and system
development. Through 1995, AHS has been a restaurant software distributor
providing sales and support primarily for the Squirrel POS (fine dining) and
Comptrex POS (fast food) product lines. In addition, AHS developed both
off-the-shelf and custom products which are designed to add value to the POS
products that it distributed.
ASI, formerly known as G.E. Random & Associates d/b/a Peripheral Design,
has provided value added computer services, network solutions, connectivity
solutions and system integration, principally to Atlanta-area businesses, since
1985. ASI provides microcomputers, peripherals, on-site and depot maintenance,
network design, network installation, cable plant design and installation, and
network consulting in the southeastern United States. Its trained technical
staff has experience in computer system integration, network configuration and
network implementation. ASI has certified network engineers on staff for LAN
and WAN network services. ASI sells, services and supports many major brands
of computers, peripherals and networks. ASI support services include on-site
hardware maintenance as well as network support programs. ASI offers local
area network design and installation, wide area network design and
installation, cable plant design, installation and management, network
management systems and network trouble shooting, protocol debugging and
performance analysis.
HSI is engaged in developing and marketing advanced healthcare information
systems to managed car organizations and their various points of service such
as physicians, hospitals and laboratories.
Immediately following the Transactions, AUBIS and HALIS will collectively
own a majority of the authorized and issued common stock of the Company. Paul
W. Harrison, who will serve as Chairman of the Board and Chief Executive
Officer of the Company upon consummation of the Transactions, beneficially owns
and/or has the power to vote (by virtue of his position as the managing member
of AUBIS and HALIS) all 15,500,000 shares of Common Stock to be issued in the
Transactions. As a result, Mr. Harrison will be able to elect the Company's
directors, determine the outcome of most corporate actions requiring
shareholder approval and otherwise to control the business of the Company.
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In January 1996, the Company entered into a letter of intent to acquire a
proprietary technology asset ("MERAD") for $200,000 in cash from Paul Harrison
Enterprises, Inc. ("PHE"), of which $50,000 will be paid in cash at the closing
of the transaction and $150,000 will be evidenced by a 12-month promissory note
bearing interest at 10% per annum. The Company is also obligated to pay, as
additional consideration, 10% of gross revenues generated from the MERAD
technology and any derivatives thereof by the Company or any of its affiliates.
PHE is owned and controlled by Paul Harrison, who also controls AUBIS and
HALIS. PHE acquired MERAD from Mr. Harrison in July 1995. Mr. Harrison
conceived and developed the initial algorithms forming the basis of the
operation of MERAD. MERAD is an artificially intelligent technology utilizing
advanced computer languages as its platform. MERAD is a tool that is utilized
to develop application software. Through the use of artificial intelligence,
MERAD can substantially decrease the development time necessary to create and
debug application software. MERAD is still in a demonstration form and is
being beta site tested through HSI. Accordingly, it is not yet available or
suitable for commercial exploitation.
When PHE acquired rights in MERAD from Mr. Harrison, Mr. Harrison retained
a perpetual royalty free license to MERAD and any enhancements and derivatives
thereof (excluding any application software developed utilizing MERAD). On
October 1, 1995, PHE licensed MERAD, in its then partially completed state, to
HALIS in order for HALIS to develop proprietary healthcare software (the
"License"). As part of the License, HALIS agreed to continue developing MERAD
and to be a beta site to test MERAD's capabilities and functionality. HALIS
agreed that any enhancements and modifications to MERAD become the sole and
exclusive proprietary property of PHE, subject to HALIS's rights to use the
same under its License. With the exception of certain licenses to use MERAD,
PHE has exclusive ownership rights to MERAD.
Consummation of the MERAD transaction is subject to the negotiation of a
definitive acquisition agreement and completion of a due diligence review by
the Company of the business/asset to be acquired and consummation of the
Transactions. It is anticipated that the MERAD acquisition will be consummated
on the later of the date of consummation of the Transactions or August 1, 1996.
On April 4, 1996, the Company entered into a letter of intent to acquire
Advance Custom Computer Solutions, Inc. ("ACC Solutions") in exchange for
$50,000 cash, $1,000,000 in common stock of the Company and up to an additional
$500,000 in common stock of the Company based on the pre-tax net income of ACC
Solutions in the twelve-month period following its acquisition by the Company.
ACC Solutions is based in Atlanta, Georgia and is a provider of medical and
dental practice management software to healthcare professionals and billing
services. Consummation of the ACC Solutions transaction is subject to the
negotiation of a definitive acquisition agreement and completion of a due
diligence review by the Company of the business of ACC Solutions.
The proposed acquisitions of MERAD and HALIS provide the cornerstone for
the Company's mission to become the leading information technology company in
delivering database software, integrated software applications, and technology
services to the healthcare industry. The Company intends to expand its markets
through the application of its MERAD database software.
The Company's strategy is to capitalize on its multimedia database
technology to produce lower cost software without compromising margins, to
provide high-quality customer service to augment its software products, and to
build its distribution channels. Expanded distribution capabilities will be
added principally through acquisitions of similar businesses operating in
different markets.
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The Company's systems business will be targeted to healthcare industry
participants such as physician practices, HMO's, home healthcare providers and
hospitals. The Company will be well positioned, through its technology, to
produce new software rapidly and at a much lower cost than the competition.
The Company expects to capitalize on the healthcare industry's demand for more
software variety, updates, convenience, lower pricing, and better support
services. In addition, the Company will provide information management systems
to management companies to help manage their point-of-care systems information.
For example, in the healthcare industry, the Company will provide an
information management system to managed care organizations that will aid in
managing the networks of medical practices.
Due to the limited resources to apply toward research and development
over the past few years, however, the Company has been unable to incorporate
certain modifications and enhancements that are needed to allow the Company to
effectively compete in the fine dining market. Utilizing AUBIS' personnel and
programming expertise, Fisher is presently undertaking modifications and
enhancements to its Fisher Restaurant Management System(R) which it hopes will
be ready in mid to late 1996, which will be used to supplement its healthcare
offerings that are planned.
BACKGROUND
The Company was organized in 1979 by Larry Fisher, its Chairman, Treasurer
and a principal shareholder, to provide vertical software applications for
potential business users of IBM minicomputers. The initial applications
provided by the Company consisted principally of business management software
directed at a variety of different businesses, including pharmacies,
supermarkets and general retail, as well as restaurants.
Spurred by the introduction of the IBM Personal Computer, or "PC," and a
concurrent capital infusion from minority investors, the Company developed its
own proprietary PC-based business applications software in 1984. At the same
time, the Company's previously diffuse marketing approach was restructured to
focus on its most successful market niche - the restaurant industry. From this
reorientation was developed the initial version of the Back Office System for
restaurants. The Back Office System was marketed as a financial and inventory
management system that readily communicated with, and complemented the
data-gathering function provided by, intelligent-terminal point-of-sale systems
sold by such manufacturers as NCR Corporation, Sweda International, Inc. and
DTS/Datachecker.
In 1986, the Company undertook to develop an integrated restaurant system
that would eliminate the inherent inefficiencies of separate computers for
"front office" point-of-sale and "back office" accounting control functions.
Utilizing the capability of an enhanced IBM PC Model AT to run multiple
terminals in a networking environment, coupled with the availability of a new
type of low-cost IBM CRT terminal, the Company's Server Entry System was
designed to permit the integrated and simultaneous operation of both
point-of-sale transaction functions and accounting functions using the same
central processing unit. The integration of the Server Entry System with the
existing Back Office System produced the current Fisher Restaurant Management
System(R), which was introduced in September 1986.
In July 1990, the Company began the task of designing and developing its
next generation product. During fiscal 1993, Fisher placed 16 pilot systems of
its next generation restaurant management system with eight regional and
national multi-store organizations for evaluation. On March 31, 1993, the
Company announced its first sale of this new product to Friendly Ice Cream
Corporation of Wilbraham, Massachusetts.
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In late 1995, the Company developed a strategy to grow its business
through the acquisition of select software companies in the hospitality and
healthcare markets. See "- General" and "- Consolidation Strategy." Pursuant
to this strategy, the Company entered into the AUBIS and HALIS Agreements in
December 1995 and in March 1996, respectively, and have entered into letters of
intent to acquire the MERAD technology and ACC Solutions.
Pending consummation of the Transactions, the Company has entered into a
management agreement with AUBIS pursuant to which Paul W. Harrison and Adam J.
Waxman provide management services to Fisher in an effort to begin the process
of effecting an orderly transition of the AUBIS Subsidiaries to the Company.
The management agreement provides for a monthly management fee of $10,000
payable to AUBIS and is terminable at the option of either the Company or AUBIS
upon five (5) business days' notice to the other party.
CONSOLIDATION STRATEGY
The Company's management believes that the opportunity exists to
consolidate the operations of a number of software companies which presently
serve the hospitality and healthcare markets. By combining certain of the
areas of each business, namely support, administration, and sales, management
believes that new products can be added which can be sold to the existing
customer base and new customer bases will be acquired into which the existing
products and services can be sold.
In addition, there are companies that provide goods and services to the
hospitality and healthcare industries such as electronic data interchange
(EDI), electronic cash management, credit and processing services and other
business applications. These companies may also be candidates within the
consolidation strategy.
This consolidation strategy is similar to that successfully implemented in
the telephone long distance market in the 1980s. The high degree of
fragmentation in the software industry lends itself to this consolidation
strategy. For many of these companies, even though they are successful, their
founders/shareholders face liquidity challenges as they are too small to go
public and, in a private transaction for cash, they might not be able to
realize the same value as if they were part of a larger company. The key to
success will be in selectively identifying those companies which have the right
mix of product, customer base and personnel. The proposed Transactions are the
first step in the Company's implementation of this strategy.
While the Company believes the strategic plan that it is undertaking,
through consummation of the Transactions, will be successful and in the best
interest of the Company, no assurances can be given that the Company indeed
will be successful and that shareholder value will be enhanced. Risk factors
include, among others, (i) timely completion of modifications and enhancements
of the Company's hospitality and healthcare products, (ii) continued working
capital availability while such products are being developed, (iii) continued
availability of Messrs. Fisher and Harrison (each will be subject to a three
year employment agreement), (iv) acceptance of the Company's products by
customers in the hospitality and healthcare markets, and (v) availability of
capital for working capital and the acquisitions over the next 12 to 15 months.
As discussed above, the success of the Company's strategic plan and
consolidation strategy will be dependent, among other things, upon the
Company's ability to raise significant capital to enable the Company to
actively seek acquisition targets. In March 1996, the Company retained the
services of the
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investment banking firm, Feltman & Co. ("Feltman"), for purposes of advising
the Company in its negotiations with one or more investors which may purchase
the Company's capital stock or debt instruments. The Company is seeking to
raise up to $30 million to enable it to have the financial resources to
actively pursue acquisition targets. The Company agreed to compensate Feltman
with a non-refundable retainer of $25,000 (to be credited against commissions
earned) and a commission equal to 8% of the amount of funds raised with their
assistance. Feltman will also receive five-year warrants, exercisable at $2.00
per share, in an amount equal to 20 shares per each $1,000 in capital raised.
Feltman's warrants will carry piggyback registration rights. The arrangement
with Feltman is exclusive through April 30, 1996 and will be extended through
June 30, 1996 if a minimum of $10 million in commitments acceptable to Fisher
are received. At the termination of its relationship with Feltman, the Company
will be obligated to Feltman for the full commission with respect to any
transaction that is consummated within one year of such termination with any
party with which discussions relating to such transaction were held during the
period of Feltman's engagement.
MANAGEMENT AND OPERATIONS OF THE COMPANY AFTER THE TRANSACTIONS
Management. Under the terms of the AUBIS Agreement, the directors and
executive officers of the Company upon consummation of the Transactions will be
as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Paul W. Harrison 41 Chairman of the Board and
Chief Executive Officer
Larry Fisher 52 President, Chief Operating Officer and
Director
Jeffrey C. Brenner 47 Director
James W. Dixon 49 Director
Nate Lipson 68 Director
</TABLE>
In addition, two additional directors will be appointed by the Board of
Directors of Fisher following the consummation of the Transactions, one nominee
to be selected by Mr. Harrison and the other nominee to be mutually agreed upon
by Messrs. Fisher and Harrison.
PAUL W. HARRISON has been the managing member of AUBIS since February
1995, a director of AHS since June 1994 and a director of ASI since January
1995. Mr. Harrison has also served as President of PHE since May 1990. From
July 1993 to December 1994, Mr. Harrison was employed as an executive advisor of
HBO & Company of Georgia, Inc., a software company in the healthcare information
industry. Mr. Harrison served as President and Chief Executive Officer of Biven
Software, Inc., a software technology company specializing in business and
healthcare applications, from 1991 to June 1993, when it was acquired by HBO &
Company of Georgia, Inc. Mr. Harrison also served as President of SOTRISS
Corp., a software technology company specializing in insurance and healthcare
applications, from 1986 to 1989, when it was acquired by Lincoln National
Information Services, Inc. ("Lincoln National"). Thereafter, Mr. Harrison
continued his employment as President and Chief Executive Officer of SOTRISS, a
subsidiary of Lincoln National, until 1991. Mr. Harrison will serve as Chairman
of the Board and Chief Executive Officer of Fisher after the Transactions are
consummated. Mr. Harrison is a director nominee of the Company.
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LARRY FISHER, the founder of the Company, has served as a director since
its organization in 1979, as President, Chief Executive Officer, and Treasurer
since 1979 and as Chairman of the Board since 1992. Prior to 1979, Mr. Fisher
was employed by IBM for 11 years in several executive sales and marketing
positions. In his last such position, Mr. Fisher was responsible for creating,
implementing and monitoring national marketing programs for the retail and
hospitality industries. Mr. Fisher will serve as President, Chief Operating
Officer and a director of the Company after the Transactions are consummated.
JEFFREY C. BRENNER has served as a director of the Company since May 1995
and will continue as a director of the Company upon consummation of the
Transactions. Mr. Brenner is currently a private investor. From 1987 to 1991,
Mr. Brenner served as President and Chairman of the Board of Tech Time, Inc., a
time and attendance software/services company.
JAMES W. DIXON has served as a director of the Company since 1989 and will
continue as a director of the Company upon consummation of the Transactions.
Mr. Dixon has served as President and Chief Executive Officer of ClientLink
Corporation, a provider of custom software and services, since March 1996. Mr.
Dixon served as Chairman of the Board of CompuCom Systems, Inc. from 1989 to
March 1996. From 1988 to 1989, he served as President and Chief Operating
Officer of CompuCom Systems. From 1987 to 1988, he served as President of the
CompuShop division of Bell Atlantic, and from 1985 to 1987, he served as
President of A Beeper Company, a division of Bell Atlantic. Mr. Dixon serves
as a director of U.S. Data, Inc. and CompuCom Systems, Inc.
NATE LIPSON is a member of AUBIS and has served as a director of AHS and
ASI since December 1995. Mr. Lipson is currently a private investor, and has
had various ownership and management interests in companies doing business in
the hospitality and carpet industries for more than the past five years. Mr.
Lipson is a director nominee of the Company.
Employment Agreements. Upon consummation of the Transactions, the Company
will enter into an Employment Agreement with Paul W. Harrison, pursuant to
which Mr. Harrison will serve as Chairman of the Board and Chief Executive
Officer of the Company. The Employment Agreement is for a term of three years,
expiring on the third anniversary of the effective date of the Transactions,
and provides for an annual base salary of $200,000 plus incentive bonus
payments. In addition, the Employment Agreement provides for Mr. Harrison to
receive options to purchase shares of common stock of Fisher in the discretion
of the Board of Directors. The Employment Agreement provides for certain
severance payments to be paid to Mr. Harrison in the event of a change in
control of the Company or a significant change in Mr. Harrison's operational
duties. In the event of a change in control, Mr. Harrison will be entitled to
terminate his employment with the Company and to receive three times the sum of
his annual base salary and the cost for one year of all additional benefits
provided to Mr. Harrison under the Employment Agreement. In addition, in the
event Mr. Harrison terminates his employment under certain stated conditions or
is terminated by the Company without cause, he will receive the greater of one
year's annual base salary or an amount equal to the base salary which would
otherwise be payable to Mr. Harrison for the remaining term of his Employment
Agreement. Any such severance payment may, at the option of the Company, be
paid to Mr. Harrison in equal monthly installments or in a lump sum at a
discounted present value. The Employment Agreement contains non-compete and
non-solicitation provisions, effective through the actual date of termination
of the Employment Agreement and for a period of two years thereafter.
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The Company currently has an employment agreement with Larry Fisher which
will continue in effect after consummation of the Transactions. Upon
consummation of the Transactions, Mr. Fisher will relinquish his titles as
Chairman of the Board and Chief Executive Officer of the Company, but will
continue to serve as its President and Chief Operating Officer. See "Executive
Compensation."
Operations. Upon consummation of the Transactions, AHS, ASI and HSI will
be wholly-owned subsidiaries of the Company and the Company's corporate name
will be changed to AUBIS, Inc. Concurrently with the consummation of the
Transactions, the Company will contribute substantially all of its assets to a
subsidiary, with the result that all of the Company's business operations will
be conducted through its operating subsidiaries. In addition, on the later to
occur of August 1, 1996 or the consummation of the Transactions, the Company
will own and commercially exploit the MERAD technology that it will be
acquiring from Paul Harrison Enterprises, Inc.
Upon consummation of the Transactions, the Company will be a technology
company that manufactures database software and delivers applications software
systems integration services to vertical markets, with an emphasis on the
healthcare and hospitality markets. The Company's mission is to be the leading
information technology company in delivery database software and point-of-event
driven software applications and technology services to the healthcare and
hospitality industries, and to capture and expand its market share through the
power of its database software.
The Fisher Management Restaurant System(R) and The Second Generation of
Fisher software have been sold to local, regional and national food service
chains. Customers have included Denny's, Inc., Friendly Ice Cream, Ralph &
Kacoo's, The Aquilon Group, as well as franchisees of International House of
Pancakes, Perkins Family Restaurants, Holiday Inn, and others. Each of these
customers has required some amount of systems integration services such as
procurement of hardware, selection and procurement of networks, staging of
hardware and software, network installation, computer hardware installation,
user training, and hardware and/or software support.
With the capabilities of ASI, the Company will be able to provide these
and other network integration services to not only the restaurants themselves,
but to their headquarters operations. In addition, the availability of the
MERAD technology will enable the Company to approach large companies in
hospitality, healthcare, and other industries to provide headquarters and point
of service processing and application software development.
Therefore, the Company's strategy is to focus on local, regional, and
national food service chains, and offer a complete systems integration service,
including the Company software and the services discussed above. The Company
will also begin a development effort to enhance the Company software for the
healthcare institutional feeding marketplace, which includes hospitals,
insurance companies, and other institutional feeding establishments related to
the healthcare industry.
Consistent with the Company's focus on chain store opportunities in food
service and healthcare, the Company will discontinue third party remarketing
relationships and eliminate the expense associated with this local selling
effort, which is not as profitable as other business lines. The margins on
third party products are much lower than those for system services as described
above, and much lower than those available for proprietary software such as the
Company systems.
The Company seeks to use its multimedia database technology to produce
lower cost software without compromising margins, to provide full service to
augment its software products, and to build
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better distribution channels through a combination of replicating AUBIS'
Atlanta model to other key cities, and consolidating distribution and service
companies in both hospitality and healthcare into the Company as independent
business units.
The Company plans to initially focus on the point-of-service system
business in the healthcare industry (doctor practices, HMO's, etc.) and on the
point-of-sale systems business in the hospitality industry (restaurants,
hotels, etc.). The Company will also be positioned, through the MERAD
technology, to produce new point-of-event software very rapidly. The Company
also plans to capitalize on the consumer's demand for more software variety and
updates, more convenience, better prices and better support services. In
addition, the Company will provide information management systems to management
companies to help manage their point-of-event systems information. For
example, in the healthcare industry, the Company would provide an information
management system to managed care organizations.
The Company will manage its operations through a combination of corporate
headquarters in Atlanta, Georgia and through independent business units that
can be managed as profit centers, and that can focus on sales and service in
different geographical areas.
The Company's strategic plan is a significant shift in its present
business direction. As a result of the Transactions, the Company anticipates
positioning itself to capture a portion of the healthcare information systems
network and integration markets. There can be no assurance, however, that the
combined companies will be successful in this endeavor or that they will be
able to achieve or sustain profitability in the future.
PRODUCTS
The Company's principal products are the Fisher Restaurant Management
System(R) and implementation support services for the food service vertical
market. The second generation of the Fisher Restaurant Management System(R) is
a color touch screen system designed as an open system utilizing a popular
fourth generation programming language and a full function relational database.
This modular software system operates on a standard personal computer network
and embraces the business needs of restaurant servers, bartenders, cashiers and
managers, as well as the corporate information needs of the larger chain
restaurant organizations. The software modules include server entry, time and
attendance, and corporate communication. Presently, the Fisher Restaurant
Management System(R) is in need of certain modifications and enhancements to
make it competitive. These modifications and enhancements are currently in
development and the Company anticipates such enhancements and modifications to
be completed by mid to late 1996.
To enhance customer satisfaction, the Company also provides implementation
support services to its food service customers. These services include product
installation, staff training, system integration, software modification, help
desk telephone support, hardware acquisition, and system staging and testing.
CUSTOMER SUPPORT, WARRANTY AND EDUCATION
In conjunction with installation of a system, the Company provides on-site
training for the customer's management, supervisory and financial personnel
designed to provide instruction in the use and operation of the system. The
amount of on-site training varies with the size of the customer's
-9-
<PAGE> 11
operation and complexity of the system being installed. Training is invoiced
as a separately itemized fee as a part of any customer's licensing of the Fisher
Restaurant Management System(R).
The Company provides ongoing customer support in the form of software
updates, when published, and telephone consultations with the Company customer
support personnel concerning software operational problems and general advice
regarding use of the Company's systems. A separate fee is also charged for
this customer support on an annual basis.
The Company warrants to its customers that the Company's software systems
will perform the applications set forth in the agreement pursuant to which the
software is licensed. In the event the software does not perform as specified,
the Company's warranty obligation is ordinarily limited to correction of errors
in the software, generally for a one-year period from the date of installation.
The Company has not incurred, and does not anticipate that it will incur,
significant expenses in connection with the fulfillment of its warranty
obligations.
MARKETING
The Company generally licenses its software products to the end user
pursuant to nonexclusive, nontransferable licenses granted for a one-time
license fee payment. The Company markets its Fisher Restaurant Management
System(R) through direct sales and through its arrangement with Global. In
addition, the Company has entered into a marketing agreement with AHS, whereby
AHS will distribute the Fisher Restaurant Management System(R). Fisher has
paid AHS $80,000 as an advance on commissions in order to provide AHS with the
resources necessary to commence distribution of its product.
COMPETITION
The Company believes its present competition in the hospitality industry
includes other independent software suppliers that sell programs for
point-of-sale functions or cross industry technical services or both. The
Company believes that there are at least six companies currently offering
"front office" software packages similar to the Company's Server Entry System.
A number of significantly larger companies in the computer industry,
including IBM and NCR Corporation, are in the restaurant software market.
The Company believes that the major competitive factors in marketing
computerized restaurant management and operations systems are maintenance,
support, price, reliability, simplicity and flexibility of the software in
adapting to operational changes and the dynamic need for management
information, and speed of operations processing.
The point of sale industry is evolving from proprietary hardware systems
to open, software based systems. Primary hardware suppliers include AT&T (NCR),
IBM, Digital Equipment Corporation, and Micros. Point of sale software is
generally supplied by small companies with revenues between $1 million and $10
million. These include Progressive Software, Infogenesis and Compris.
Competition in the healthcare information services industry is intense and
includes healthcare software companies such as HBO & Company, service bureaus
and general computer software and services companies that also offer system
integration services.
-10-
<PAGE> 12
CUSTOMERS
During fiscal 1996, the Company provided support services for its Fisher
Restaurant Management System(R) to approximately 100 customers in the
hospitality industry, none of which accounted for more than 10% of the
Company's revenues for the year.
PRODUCT PROTECTION
The Company regards its software as proprietary and protects it with
common law copyrights, trade secret law and internal nondisclosure safeguards.
Restrictions on disclosure and transferability are incorporated into its
software license agreements, and each copy of the software contains copyright
notices, both internally (flashed on the terminal screen at commencement of the
program) and externally (labeled on each disc containing the software). Most
of the Company's customers are provided only object code versions of the
software, as further protection against pirating, although a few select
customers also receive source code. Despite these protections, it may be
possible for the Company's competitors or users to copy all or portions of the
Company's proprietary software or to obtain information which the Company
regards as trade secrets. The Company has not patented its software and has
not federally registered any copyrights with respect thereto, and reliance on
common law copyright and trade secret protection affords somewhat limited
practical protection.
The Company has registered with the U.S. Patent and Trademark Office the
trademark The Company Business Systems FBS\ (on the Principal Register) and the
service mark Fisher Restaurant Management System(R) (on the Supplemental
Register).
The Company has independently developed its software products. However,
there can be no assurance that claims will not be asserted against the Company
that its software codes, concepts, ideas and documentation infringe on the
proprietary rights of others in software they developed. As of April 15, 1996,
there were no actions claiming patent infringement pending against the Company.
The following trademarks or service marks are used in this report: Fisher
Restaurant Management System(R) is a service mark of Fisher Business Systems,
Inc. and Personal System/2(TM) is a trademark of International Business
Machines Corporation.
BACKLOG
The Company typically licenses a multi-store chain to use its software for
up to a specified number of locations. The Company's backlog therefore
consists of a schedule of services to be performed in conjunction with each
license. If the Company is supplying hardware, typical lead times are between
30 and 45 days. There is currently no backlog of orders for the Fisher
Restaurant Management System(R).
EMPLOYEES
As of March 15, 1996, the Company had seven full-time employees, including
one in senior management. The Company also utilizes contract personnel for
support services, installations of additional the Company systems and
programming. In an effort to reduce costs over the past year, the number of
employees has been substantially reduced, leaving the Company with
substantially diminished capabilities in the areas of product development and
quality control.
-11-
<PAGE> 13
Competition for qualified personnel in the software industry is intense.
The Company's ability to attract and retain qualified personnel has been
substantially diminished by its weakened financial condition. There can be no
assurance that the Company will be able to attract or retain qualified
personnel in the future.
None of the Company's employees is subject to a collective bargaining
agreement, and the Company considers its employee relations to be good. The
Company requires all employees to sign an agreement in which they undertake not
to disclose the Company's trade secrets to others during the period of, or
after termination of, their employment.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company's corporate headquarters are located in 2,500 square feet of
office space in Marietta, Georgia. In anticipation of the consummation of the
Transactions, the office space is being shared by the Company with AHS and ASI
pursuant to a 12-month lease at a monthly rental of $3,000.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company is a
party or to which its properties are subject; nor are there any material
proceedings known to the Company to be contemplated by any governmental
authority; nor are there any material proceedings known to the Company, pending
or contemplated, in which any director, officer or affiliate or any principal
security holder of the Company, or any associate of any of the foregoing is a
party or has an interest adverse to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders of the Company
during the fourth quarter ended January 31, 1996.
-12-
<PAGE> 14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
On October 30, 1992, the Company's Common Stock ceased quotation on the
Nasdaq Small Cap Market. Price information on the Company's Common Stock is
now available on the Nasdaq "Bulletin Board." The trading symbol for the
Common Stock is "FBUSC."
As of March 29, 1996, there were approximately 143 holders of record of
the Company's Common Stock; however, the Company believes that there are more
than 300 beneficial owners of its Common Stock.
The Company has not paid any dividends and does not expect to do so in the
foreseeable future. Although the payment of dividends rests with the
discretion of the Board of Directors, the Company intends to employ its
earnings, if any, to finance its ongoing operations and to further develop its
business.
-13-
<PAGE> 15
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS
FISCAL YEAR ENDED JANUARY 31, 1996 COMPARED WITH FISCAL YEAR ENDED JANUARY 31,
1995
Revenues for the year ended January 31, 1996 (fiscal 1996) were $732,549,
a decrease of $529,642, or 42%, from the prior year revenues of $1,262,191.
The decrease in revenues is primarily attributable to the fact that
substantially all of the Company's revenues in fiscal 1996 were derived from
support services for its Fisher Restaurant Management System(R), rather than
from sales of systems. The Company is in the process of modifying and
enhancing its Fisher Restaurant Management System(R) to make it competitive.
See "Business."
The allowance for possible losses on accounts receivable decreased to
$3,000 during fiscal 1996, as compared to $40,000 for the previous year, as a
result of the significant decrease in accounts receivable during the period.
Selling, general and administrative expenses were $681,981 for fiscal
1996, compared to $1,945,088 for the prior year. The decrease of $1,263,107,
or 65%, was largely due to reduction in personnel during the period.
The Company recorded net income for fiscal 1996 of $44,414, as compared to
a net loss of $1,188,870 for the prior year. The improvement in net income is
primarily the result of significant reductions in operating expenses, as well
as a benefit of $243,838 from debt restructuring.
FISCAL YEAR ENDED JANUARY 31, 1995 COMPARED WITH FISCAL YEAR ENDED JANUARY 31,
1994
Revenues for the year January 31, 1995 (fiscal 1995) were $1,262,191, a
decrease of $4,076,853, or 76%, from the prior year revenues of $5,339,044.
The decrease in revenues is primarily attributable to the loss of the Company's
client/server service business and the Company's focus on opportunities for the
sale of higher margin software and software services.
The Company did not incur any research and development expenses in fiscal
1995. Research and development expenses for the prior year were $695,561. The
elimination of these expenses relates directly to the maturation of the
Company's current product.
The allowance for possible losses on accounts receivable decreased to
$40,000 during fiscal 1995, as compared to $230,476 for the previous year, as a
result of the significant decrease in accounts receivable during the period.
Selling, general and administrative expenses were $1,945,088 for fiscal
1995 compared to $2,725,354 for the prior year. The decrease of $780,266, or
29%, was largely due to reduction in personnel during the period.
Interest expense decreased significantly as the Company's line of credit
has expired. A replacement facility has not been obtained by the Company.
-14-
<PAGE> 16
The Company recorded a net loss for fiscal 1995 of $1,278,918, as compared
to a net loss of $530,378 for the prior year. The increase in the net loss was
primarily due to the loss of the Company's client/server services businesses.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 1996, the Company had a working capital deficit of
$379,492, compared to a deficit of $1,174,987 at January 31, 1995. With the
departure in January 1994 of substantially all of the former Blue Mountain
employees, the Company lost its ability to provide client/server services to
its customers, including MCI. Accordingly, the Company's revenues and cash
flow for fiscal 1995 and fiscal 1996 have been materially adversely affected by
the loss of revenues from its former client/server business.
The Company has instituted stringent measures designed to reduce expenses
as much as possible consistent with providing the level of services required by
its customers, including a reduction of the number of personnel. The Company
presently employs seven people.
In fiscal 1996, the Company completed a private placement of 2,033,333
shares of Common Stock and 1,500,000 shares of Series A Convertible Preferred
Stock, resulting in proceeds of $800,000. The Preferred Stock is convertible
into Common Stock on a one-for-one basis, subject to certain adjustments based
on the Company's earnings and the price per share paid by the Company in any
acquisition. The proceeds of this offering were applied to repay accounts
payable, to repurchase certain of the Company's outstanding shares, to fund
accounts receivable and marketing expenses and to increase the working capital
of the Company.
In the first quarter of fiscal 1997, the Company commenced a private
placement of $1.2 million in 7.0% convertible promissory notes due January 15,
1998 (the "Notes"). As of April 30, 1996, the Company had received a total of
$800,000 from this placement. The Notes are convertible into Common Stock at
the option of the holder at a conversion price of $1.00 per share. As of April
15, 1996, approximately $475,000 of the proceeds of this offering had been
advanced to AUBIS to support its operations. AUBIS' cash needs result, in
part, from the loss of a significant supplier and customer of AHS. This
supplier accounted for approximately 54% of the total revenues of the AUBIS
Subsidiaries for the year ended December 31, 1995. The balance of the proceeds
from the sale of the Notes have been utilized to expand Fisher's sales and
marketing capabilities in the three primary areas of business which it will
pursue subsequent to the completion of the Transactions: system and service
sales to the hospitality and healthcare industries and networking systems and
services to a variety of industries.
The Company has entered into definitive agreements to acquire the AUBIS
Subsidiaries and HSI. See "Business." The Company intends to account for the
AUBIS and HALIS Transactions as a reverse purchase for accounting and financial
reporting purposes. Under this method of accounting, AUBIS and HALIS will be
treated as the acquiring entities. As a result, the historical pre-merger
financial statements of the combined company will be those of AUBIS and HALIS,
rather than the Company.
In anticipation of the Transactions, the Company has engaged Feltman & Co.
to assist it in raising up to $30 million through the issuance of convertible
notes and warrants. See "Business-Consolidation Strategy."
-15-
<PAGE> 17
The Company anticipates that it will fund the cash portion of the MERAD
acquisition and the ACC Solutions acquisition from working capital and capital
infusions.
Until such time as the Transactions can be consummated, the Company's
revenue will be limited to revenue from support contracts with existing
customers, direct sales of its software and services and indirect sales of its
software and services.
SEASONALITY
The Company's revenues historically exhibit a seasonal pattern, with the
fourth fiscal quarter generally being a lower revenue period than other
quarters. This is due to the busy holiday season for most restaurants during
the period between Thanksgiving and Christmas. Many restaurants are reluctant
to install new software systems during this time.
INFLATION
The Company is affected by inflation through increased personnel costs and
other selling, general and administrative expenses. Hardware costs have
generally declined and this trend is expected to continue.
MAJOR CUSTOMERS
The Company believes that even with the market acceptance of its second
generation Fisher Restaurant Management System, it will continue to be
dependent on a few customers for its success. The Company continues to attempt
to broaden its customer base in all areas of its market.
ITEM 7. FINANCIAL STATEMENTS.
The following financial statements and reports thereon are filed with this
report:
Report of Independent Certified Public Accountants
Balance Sheets - January 31, 1996 and 1995
Statements of Operations - Years ended January 31, 1996, 1995 and 1994
Statements of Stockholders' Deficit - Years ended January 31, 1996, 1995
and 1994
Statements of Cash Flows - Years ended January 31, 1996, 1995 and 1994
Summary of Accounting Policies
Notes to Financial Statements
-16-
<PAGE> 18
Report of Independent Certified Public Accountants
Board of Directors
Fisher Business Systems, Inc.
Atlanta, Georgia
We have audited the accompanying balance sheets of Fisher Business Systems,
Inc. as of January 31, 1996 and 1995, and the related statements of operations,
stockholders' deficit and cash flows for each of the three years in the period
ended January 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fisher Business Systems, Inc.
at January 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended January 31, 1996 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has had recurring losses and has a working
capital deficit and a net capital deficit that raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ BDO Seidman, LLP
Atlanta, Georgia
February 22, 1996, except for Note 9,
which is as of March 29, 1996
-17-
<PAGE> 19
<TABLE>
<CAPTION>
=================================================================================================================================
January 31, 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT
<S> <C> <C>
Cash and cash equivalents $177,649 $ 69,219
Certificates of deposit - 36,586
Accounts receivable, less allowance for
possible losses of $3,000 in 1995 3,028 10,860
Other current assets 8,254 4,064
- ---------------------------------------------------------------------------------------------------------------------------------
Total current assets 188,931 120,729
- ---------------------------------------------------------------------------------------------------------------------------------
EQUIPMENT AND FURNITURE
Computer equipment 143,550 140,445
Office furniture and fixtures 64,930 64,930
- ---------------------------------------------------------------------------------------------------------------------------------
208,480 205,375
Less accumulated depreciation 197,048 184,023
- ---------------------------------------------------------------------------------------------------------------------------------
Net equipment and furniture 11,432 21,352
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT IN SALES TYPE LEASE (Note 6) 31,484 -
OTHER ASSETS (Note 7) 55,687 -
- ---------------------------------------------------------------------------------------------------------------------------------
$287,534 $142,081
=================================================================================================================================
</TABLE>
-18-
<PAGE> 20
FISHER BUSINESS SYSTEMS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
======================================================================================
January 31, 1996 1995
- --------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT
<S> <C> <C>
Accounts payable and accrued expenses $ 360,018 $ 733,793
Deferred revenue 228,405 362,048
Redeemable stock and settlement agreement (Note 4) - 199,875
- --------------------------------------------------------------------------------------
Total current liabilities 588,423 1,295,716
REDEEMABLE STOCK AND SETTLEMENT AGREEMENT (Note 4) - 140,000
- --------------------------------------------------------------------------------------
Total liabilities 588,423 1,435,716
- --------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 1 and 4)
STOCKHOLDERS' DEFICIT (Notes 3 and 7)
Convertible preferred stock, $.10 par - shares authorized,
5,000,000; 1,500,000 and -0- outstanding 150,000 -
Common stock, $.01 par - shares authorized, 10,000,000;
4,869,504 and 3,003,171 outstanding 48,695 27,532
Additional paid-in capital 8,361,486 7,731,817
Accumulated deficit (8,854,320) (9,046,234)
- --------------------------------------------------------------------------------------
(294,139) (1,286,885)
Treasury stock, at cost, 1,600 shares (6,750) (6,750)
- --------------------------------------------------------------------------------------
Total stockholders' deficit (300,889) (1,293,635)
- --------------------------------------------------------------------------------------
$ 287,534 $ 142,081
======================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
-19-
<PAGE> 21
FISHER BUSINESS SYSTEMS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
==================================================================================
Years ended January 31, 1996 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
SYSTEM SALES AND SERVICES $ 732,549 $ 1,262,191 $5,339,044
- ----------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of goods sold 246,992 441,485 1,931,245
Research and development - - 695,561
Allowance for possible losses on
accounts receivable 3,000 40,000 230,476
Selling, general and administrative 681,981 1,945,088 2,725,354
- ----------------------------------------------------------------------------------
Total costs and expenses 931,973 2,426,573 5,582,636
- ----------------------------------------------------------------------------------
Operating loss (199,424) (1,164,382) (243,592)
- ----------------------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Loss on disposal of assets - (115,969) (130,974)
Investment income - 1,433 8,346
Interest expense - - (164,158)
- ----------------------------------------------------------------------------------
Total other income (expense) - (114,536) (286,786)
- ----------------------------------------------------------------------------------
LOSS BEFORE EXTRAORDINARY ITEM AND
REDEEMABLE STOCK (199,424) (1,278,918) (530,378)
EXTRAORDINARY INCOME FROM DEBT
RESTRUCTURING (Note 1) 243,838 - -
- ----------------------------------------------------------------------------------
NET INCOME (LOSS) 44,414 (1,278,918) (530,378)
REVERSAL (ACCRETION) OF REDEEMABLE
STOCK (Note 4) 147,500 90,048 (136,320)
- ----------------------------------------------------------------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCK $ 191,914 $(1,188,870) (666,698)
- ----------------------------------------------------------------------------------
NET INCOME (LOSS) PER COMMON SHARE
Loss before extraordinary item and
redeemable stock $ (.01) $ (.39) $ (.24)
Extraordinary item .04 - -
- ----------------------------------------------------------------------------------
NET INCOME (LOSS) PER COMMON SHARE $ .03 $ (.39) $ (.24)
==================================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING 6,849,254 3,032,212 2,801,664
==================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
-20-
<PAGE> 22
<TABLE>
<CAPTION>
===========================================================================================================================
Preferred Stock Common Stock
------------------------ ------------------------
Shares Amount Shares Amount
===========================================================================================================================
<S> <C> <C> <C> <C>
BALANCE, at January 31, 1993 - $ - 2,253,171 $22,532
Issuance of common stock
upon acquisition - - 800,000(A) 5,500
Net loss before accretion of
redeemable stock - - - -
Accretion of redeemable stock - - - -
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE, at January 31, 1994 - - 3,053,171 28,032
Net loss before reversal of
redeemable stock - - - -
Repurchase and retirement of
common stock - - (300,000) (3,000)
Issuance of common stock pursuant
to settlement agreement - - 250,000 2,500
Reversal of redeemable stock - - - -
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE, at January 31, 1995 - - 3,003,171 27,532
Issuance of common stock
in private offerings - - 2,033,333 20,333
Issuance of preferred stock
in private offerings 1,500,000 150,000 - -
Repurchase and retirement of
common stock (Note 4) - - (167,000) (1,670)
Net income before reversal of
redeemable stock - - - -
Reversal of redeemable stock - - - 2,500
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE, at January 31, 1996 $1,500,000 150,000 4,869,504 $48,695
===========================================================================================================================
</TABLE>
(A) Includes 250,000 shares subject to redemption agreement.
-21-
<PAGE> 23
FISHER BUSINESS SYSTEMS, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED JANUARY 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
====================================================================================================================
Additional Total
paid-in Accumulated Treasury stockholders'
capital deficit stock deficit
====================================================================================================================
<S> <C> <C> <C>
$7,652,317 $(7,190,666) $(6,750) $ 477,433
132,000 - - 137,500
- (530,378) - (530,378)
- (136,320) - (136,320)
- --------------------------------------------------------------------------------------------------------------------
7,784,317 (7,857,364) (6,750) (51,765)
- (1,278,918) - (1,278,918)
(52,500) - - (55,500)
- - - 2,500
- 90,048 - 90,048
- --------------------------------------------------------------------------------------------------------------------
7,731,817 (9,046,234) (6,750) (1,293,635)
479,669 - - 500,002
150,000 - - 300,000
- - - (1,670)
- 44,414 - 44,414
- 147,500 - 150,000
- --------------------------------------------------------------------------------------------------------------------
$8,361,486 $(8,854,320) $(6,750) $ (300,889)
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
-22-
<PAGE> 24
FISHER BUSINESS SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
==================================================================================================================================
Years ended January 31, 1996 1995 1994
==================================================================================================================================
OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) before redeemable stock $ 44,414 $(1,278,918) $(530,378)
Adjustments to reconcile net income (loss) to
cash provided by (used for) operating activities:
Depreciation 13,025 120,169 194,344
Extraordinary item (243,838)
Amortization - 317,016 595,866
Allowance for losses on accounts receivable 3,000 40,000 230,476
Loss on disposal of assets - 115,969 130,974
Changes in operating assets and liabilities
affecting operations:
Accounts receivable 4,832 699,334 (585,490)
Certificate of deposit 36,586 (1,118) -
Inventories - 66,899 129,771
Other current assets (4,190) 168,198 102,502
Accounts payable and accrued expenses (119,052) 224,033 47,798
Accrued compensation and benefits (10,885) (28,028) 1,191
Deferred revenue (133,643) (164,681) (260,662)
Customer deposits - - (23,822)
- ---------------------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) operating activities (409,751) 278,873 32,570
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Net purchases of equipment and furniture (3,103) - (33,616)
Proceeds from sale of Blue Mountain Software - 250,000 -
Proceeds upon maturity of certificates of deposit - - 19,245
Additions to capitalized software
development costs - - (430,917)
Investment in sales-type lease (31,484) - -
Acquisition cash - - 12,030
Other assets (55,687) - -
- ---------------------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) investing activities (90,274) 250,000 (433,258)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-23-
<PAGE> 25
FISHER BUSINESS SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
==================================================================================
Years ended January 31, 1996 1995 1994
==================================================================================
<S> <C> <C> <C>
FINANCING ACTIVITIES
Payments on line-of-credit - (410,484) -
Proceeds from sale of preferred stock 300,000 - -
Proceeds from sale of common stock 500,002 2,500 -
Retirement of stock (1,670) (55,500) -
Net borrowings on line of credit - - 251,484
Redeemable stock and settlement agreement (189,877) - -
- ----------------------------------------------------------------------------------
Cash provided by (used for) financing activities 608,455 (463,484) 251,484
- ----------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 108,430 65,389 (149,204)
CASH AND CASH EQUIVALENTS, beginning of year 69,219 3,830 153,034
- ----------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of year $ 177,649 $ 69,219 $ 3,830
==================================================================================
</TABLE>
See accompanying summary of accounting polices and notes to financial
statements.
-24-
<PAGE> 26
FISHER BUSINESS SYSTEMS, INC.
SUMMARY OF ACCOUNTING POLICIES
================================================================================
BUSINESS Fisher Business Systems, Inc., d/b/a "Fisher
Restaurant Systems" (the Company), primarily
designs, develops, markets, licenses and supports
proprietary computer software for use in operating
and managing restaurants.
BASIS OF PRESENTATION The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect reported amounts of assets
and liabilities and disclosure of contingent assets
and liabilities at the date of the financial
statements and the reported amounts of revenues and
expenses during the reporting period. Actual
results could differ from those estimates.
CASH EQUIVALENTS The Company considers all highly liquid investments
with a maturity of three months or less when
purchased to be cash equivalents.
REVENUES Revenues are recognized as follows:
Licensing and
sales-type/leasing
agreements - Upon delivery of the
software to the
customer.
Support Contracts - Monthly, upon contract
effective date, over the
life of the contract.
Installation, training - When provided to the
and education customer.
Hardware - Upon shipment of the
computer equipment to the
customer.
EQUIPMENT AND FURNITURE Equipment and furniture are stated at cost.
Depreciation is computed using the straight-line
method based on the estimated useful lives of the
assets, generally three to five years. For income
tax purposes, depreciation is computed on
accelerated methods.
SOFTWARE DEVELOPMENT The Company capitalizes software development costs
COSTS in accordance with the Statement of Financial
Accounting Standards No. 86. Amortization of
capitalized software development costs, totaling $0
in 1996, $317,016 in 1995, and $528,404 in 1994, was
computed using the straight-line method over the
estimated life of the products of three years.
-25-
<PAGE> 27
FISHER BUSINESS SYSTEMS, INC.
SUMMARY OF ACCOUNTING POLICIES
================================================================================
During the fourth quarter of 1995, the Company
recorded a charge of $193,720 to fully amortize
software development costs.
INCOME (LOSS) PER Net income (loss) per share has been computed
COMMON SHARE for each fiscal year on the basis of the weighted
average number of common shares outstanding.
Additionally, in computing loss per common share,
the Company has adjusted the income (loss) before
extraordinary item and the net loss by the amount of
the accretion credited or charged to its accumulated
deficit. Common share equivalents (options) have
not been considered in 1995 and 1994 because their
effect is anti-dilutive.
TAXES ON INCOME Income taxes are based on income (loss) for
financial reporting purposes and reflect a current
tax liability (asset) for the estimated taxes
payable (recoverable) in the current year tax return
and changes in deferred taxes. Deferred tax
liabilities or assets are recognized for the
estimated tax effects of temporary differences
between financial reporting and taxable income
(loss) and for loss carryforwards based on enacted
tax laws and rates. A valuation allowance is used
to reduce deferred tax assets to the amount that is
more likely than not to be realized (Note 5).
-26-
<PAGE> 28
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. GOING CONCERN The Company's continued existence is dependent upon
the success of its plans to resolve its liquidity
problems by broadening its customer base, thereby
increasing revenues, and by obtaining additional
equity capital, debt financing and/or merger. In an
effort to continue to resolve its liquidity
problems, the Company successfully renegotiated
terms with many of its vendors which resulted in
reductions of vendor payables of $243,838. In
addition, during 1995, the Company completed private
placements of its preferred and common stock which
resulted in proceeds of $800,000. Furthermore, the
Company is in the process of completing a private
placement of 7% convertible promissory notes which
has resulted in proceeds of $675,000 to date. The
promissory notes are convertible on the basis of $1
in debt being converted to one share of common
stock. In addition, the Company has entered into an
agreement and plan of merger and reorganization with
AUBIS, LLC and HALIS, LLC. Under the terms of the
merger agreement, the shareholders of AUBIS and
HALIS will exchange 100% of their issued and
outstanding shares for 10,500,000 and 5,000,000
shares, respectively, in the Company in a tax free
exchange. The merger is contingent upon the approval
of the Company's shareholders (see Note 9).
2. ACQUISITION AND On February 1, 1993, the Company acquired all of the
SALE OF BLUE MOUNTAIN outstanding common stock of Blue Mountain Software,
Inc. in exchange for 800,000 unregistered shares of
the Company's common stock. Additionally, two of
Blue Mountain Software stockholders were each
granted options to purchase 150,000 shares of the
Company's common stock at an exercise price of $.50
per share. The acquisition has been accounted for
as a purchase, and accordingly, the purchase price
based upon the estimated fair value of the Company's
stock issued in the transaction has been allocated
to the net assets acquired. The aggregate
consideration given in the transaction was $431,104.
On March 25, 1994, substantially all of the assets,
which included all software object libraries,
customer lists and intellectual property related to
Blue Mountain Software, Inc. were sold for $250,000
to a Company whose chairman also serves as a
director of the Company.
-27-
<PAGE> 29
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
3. STOCKHOLDERS' ISSUANCES
DEFICIT
In fiscal 1995, the Company completed private
placements of 2,033,333 shares of common stock and
1,500,000 shares of Class A Convertible Preferred
Stock, resulting in proceeds of $800,002. The shares
of preferred and common stock have not been
registered under the Federal Securities Act of 1933
or the Georgia Securities Act of 1973, and as such
there are certain restrictions on their
transferability. The preferred shares may be issued
in series, and each series may have voting rights,
preferences, conversion rights or restrictions as
determined by the Board of Directors prior to
issuance. Subsequent to year end, the preferred
shares were converted into 1,500,000 shares of
common stock. During 1995, the Company issued
1,450,000 of warrants which entitled the holders to
purchase shares of common stock at $.25 per share.
The Company received notice in January 1996 that the
warrants would be exercised.
STOCK OPTION PLANS
The Company had an incentive stock option plan and a
non-qualified stock option plan. The incentive
stock option plan, for key employees and officers,
has reserved 60,400 shares of common stock for
issuance thereunder. The terms of exercise may vary
with each individual grant, as determined by the
Board of Directors. Options are not exercisable
until at least one year after the date of grant and
expire if not exercised within ten years of date of
grant. Options may not be granted at less than the
market price of the common stock at date of grant.
The incentive stock option plan expired at January
29, 1996.
-28-
<PAGE> 30
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
Incentive stock option activity for each of the three
years in the period ended January 31, 1996 is as
follows:
<TABLE>
<CAPTION>
Number Exercise
Options Price
============================================================
<S> <C> <C>
Outstanding, January 31, 1993 153,275 $ .50
Awarded 295,300 $ .50
Canceled (333,295) $ .50
------------------------------------------------------------
Outstanding, January 31, 1994 115,280 $ .50
Canceled (54,880) $ .50
------------------------------------------------------------
Outstanding, January 31, 1995
and 1996 60,400 $ .50
------------------------------------------------------------
Exercisable, January 31, 1996 60,400 $ .50
============================================================
</TABLE>
The non-qualified stock option plan, is for key
employees, directors and officers of the Company.
Under this plan the options may be exercisable
immediately after grant, although the terms of exercise
may vary with each individual grant, as determined by
the Board of Directors. In addition, the options
expire 10 years after the date of grant and may not be
granted at less than the market price of the common
stock at date of grant. The Plan also provides for
automatic annual grants to non-employee directors.
-29-
<PAGE> 31
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
Non-qualified stock option plan and other
non-qualified options activity for each of the three
years in the period ended January 31, 1996 is as
follows:
<TABLE>
<CAPTION>
Number of Exercise
Options Price
===================================================================
<S> <C> <C>
Outstanding, January 31, 1993 16,060 $1.25 - $20.00
Awarded 281,065 $ .50
Canceled (151,700) $ .50
-------------------------------------------------------------------
Outstanding, January 31, 1994 145,425 $ .50 - $20.00
Awarded 4,700 $ .50
Cancelled (90,185) $ .50 - $13.12
-------------------------------------------------------------------
Outstanding, January 31, 1995 59,940 $ .50 - $20.00
Awarded 750,000 $ .25 - .87
-------------------------------------------------------------------
Outstanding, January 31, 1996 809,940 $ .25 - $20.00
===================================================================
</TABLE>
In the event an employee or officer terminates
employment, all unexercisable options under either plan
are canceled and exercisable options expire after 90
days. In the event a non-employee director resigns,
all unexercisable options under the non-qualified stock
option plan are canceled and exercisable options expire
after three years.
The Financial Accounting Standards Board (FASB)
issued SFAS No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123), which the Company is
required to adopt in the fiscal year ended January 31,
1997. SFAS No. 123 requires companies to estimate the
value of all stock-based compensation using a
recognized pricing model. Companies have the option of
recognizing this value as an expense or disclosing its
effects on net income. The Company's management has
not yet determined its method of adoption or the
financial statement impact of adopting SFAS No. 123.
-30-
<PAGE> 32
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
4. COMMITMENTS In connection with the merger of Blue Mountain
Software, in February 1, 1993, the Company entered
into a Stock Repurchase Agreement ("Agreement") with
one of the Blue Mountain Software stockholders,
involving 250,000 shares of the Company's common
stock. Due to its repurchase obligation, the 250,000
shares covered by the agreement have been recorded
as redeemable stock. The aggregate repurchase
obligation due under the Agreement was originally
$510,000. However, the Company determined the
discounted value of the underlying shares of common
stock to be $293,604 on February 1, 1993, based on a
risk adjusted rate of return of 30%. The difference
in the original valuation and aggregate obligation
of $216,396 was being accreted over the duration of
the agreement and a corresponding amount charged
against the Company's accumulated deficit.
On August 8, 1994, the Company entered into a Mutual
General Release and Settlement Agreement ( the
"Settlement Agreement") with the former shareholder
of Blue Mountain ( the "Plaintiff") settling certain
litigation that had been filed against the Company
by the Plaintiff claiming damages for breach of a
stock repurchase agreement and an employment
agreement with the Company. Pursuant to the
Settlement Agreement, the Company resumed payments
under the employment agreement, issued 250,000
shares of the Company's common stock to the
Plaintiff, and agreed to the entry of a judgment
against the Company in the amount of $357,500, which
the Plaintiff agreed not to enforce so long as the
Company timely made all payments under the
employment agreement and the Plaintiff received
$250,000 from the Company or its designee no later
than February 1, 1995.
The Settlement Agreement was amended on February 27,
1995 ("Amended Settlement Agreement"). Pursuant to
the Amended Settlement Agreement, the Company
resumed payments under the employment agreement, and
agreed to the entry of a judgment against the
Company in the amount of $339,875. Under the
judgment, the Company was required to redeem 300,000
shares of common stock held by the Plaintiff in the
amount of $268,000. The remaining portion of the
judgment represented the amount owed under the
employment agreement. Under the terms of the
Amended Settlement Agreement, the Company was
required to redeem 21,000 shares from the Plaintiff
in the amount of $15,000 no later than March 1, 1995
and an additional 21,000 shares at a total price of
$15,000 on April 1, 1995. The Company was also
required to repurchase 133,000
-31-
<PAGE> 33
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
shares in the amount of $98,000 no later than May 1,
1995 and repurchase 125,000 shares for $140,000 no later
than February 1, 1996.
On September 15, 1995, the plaintiff's shares of the
Company's stock were purchased by a private investor, and
in connection therewith, the plaintiff released the
Company from all obligations, including those under the
Mutual General Release and Settlement Agreement.
Accordingly, the Company reversed the $147,500 remaining
redeemable stock balance.
EMPLOYEE BENEFIT PLAN
The Company sponsors a 401(K) retirement savings plan
for all employees who meet certain eligibility
requirements. Employees may contribute to the plan up to
20% of their salary or the maximum allowed by the IRS.
The Company may elect to make matching and/or
discretionary contributions. Employee contributions are
immediately 100% vested while Company contributions are
subject to a six year vesting schedule. For the years
ended January 31, 1996, 1995 and 1994, the Company made
no contributions to the plan.
EMPLOYMENT AGREEMENT
The Company has a three year employment agreement with
its president which expires December 31, 1998. The
agreement provides for an annual base salary of $175,000
plus incentive bonus payments. In addition, the
employment agreement provides for the granting of stock
options at the discretion of the Board of Directors.
5. INCOME The sources of temporary differences and their effect
TAXES on the net deferred taxes are as follows:
January 31, 1996 1995
==========================================================
Net operating loss
carryforwards $ 3,384,454 $ 3,188,000
Deferred revenue
differences 80,186 144,000
Other basis differences - 1,200
Less valuation
allowance (3,464,640) (3,334,200)
----------------------------------------------------------
$ - $ -
==========================================================
-32-
<PAGE> 34
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
Differences between the effective income tax rate and the
statutory federal income tax rate were primarily the
result of the valuation allowance which fully reserved the
net deferred tax asset which arose from the tax loss
carryforwards and other temporary differences generated
during the years ended January 31, 1996, 1995 and 1994.
At January 31, 1996 the Company has approximately
$8,500,000 of net operating loss carryforwards available
to offset future tax liabilities. The contemplated
acquisition transactions described in Note 9 could result
in certain limitations on the utilization of the net
operating loss carryforwards.
These losses expire as follows:
Year Amount
---------------------------------------------------------
2000 $ 148,000
2001 111,000
2002 246,000
2003 1,224,000
2004 1,571,000
2005 781,000
2006 1,700,000
2007 870,000
2008 265,000
2009 1,054,000
2010 491,000
--------------------------------------------------------
$8,461,000
========================================================
6. SALES-TYPE LEASE The Company is lessor under terms of a thirty six month
sales-type lease involving a restaurant computer system.
The Company's net investment in this lease at January 31,
1996, is comprised of the following:
Minimum lease payments receivable $ 34,947
Less unearned income (3,463)
----------------------------------------------------------
Net investment in sales type lease $ 31,484
-33-
<PAGE> 35
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
Future minimum payments to be received under sales type
lease are as follows:
Year Amount
---------------------------------------------------------
1997 $ 13,980
1998 13,980
1999 6,987
---------------------------------------------------------
Total $ 34,947
=========================================================
7. OTHER ASSETS Prior to year end, in connection with the acquisition of
AUBIS, LLC (see Note 9), the Company advanced to AUBIS
$20,000 for operations. In addition, the Company has
capitalized $35,687 in costs associated with the proposed
acquisition of AUBIS. Subsequent to year end the Company
advanced to AUBIS an additional $163,000. The amount
funded to AUBIS will be forgiven upon the completion of
the merger.
8. SUPPLEMENTAL Supplemental information required by Statement
DISCLOSURE OF of Financial Accounting Standards No. 95, relative to the
CASH FLOW statements of cash flows, is as follows:
INFORMATION
1996 1995 1994
========================================================
Interest paid $ - $9,504 $142,902
========================================================
As discussed in Note 2, on February 2, 1993, the Company
acquired all of the outstanding common stock of Blue
Mountain Software, Inc. in exchange for 800,000
unregistered shares of Fisher's common stock in a
non-cash transaction. The acquired assets included
$12,030 in cash.
9. SUBSEQUENT EVENTS The Company is in the process of completing a private
placement of 7.0% convertible promissory notes due
January 15, 1998 (the "Notes"). The Notes are
convertible into Fisher common stock at the option of the
holder at a conversion price of $1.00 per share. Proceeds
from the sale of the Notes will be utilized to expand
Fisher's sales and marketing capabilities in the areas of
its business. The Company has received proceeds of
$675,000 to date from this placement.
-34-
<PAGE> 36
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
Fisher has agreed to merge AUBIS Hospitality Systems,
Inc. ("AHS") and AUBIS Systems Integration, Inc. ("ASI")
(collectively, the "AUBIS Subsidiaries"), each a
wholly-owned subsidiary of AUBIS, L.L.C. ("AUBIS") with
and into two newly formed wholly-owned subsidiaries of
Fisher (collectively, the "Fisher Subsidiaries"),
pursuant to the Amended and Restated Agreement and Plan
of Merger and Reorganization, dated December 13, 1995 and
amended and restated as of March 29, 1996 (the "AUBIS
Agreement"), among AUBIS, the AUBIS Subsidiaries, certain
affiliates of AUBIS, Fisher and the Fisher Subsidiaries,
in which AUBIS will receive 10,500,000 shares of Fisher
Common Stock ("AUBIS Transaction"). In addition, Fisher
has entered into a Stock Purchase Agreement, dated as of
March 29, 1996, between Fisher and HALIS, L.L.C.
("HALIS"), an entity controlled by the benefical
shareholder of AUBIS, and its affiliates, providing for
the acquisition by Fisher of HALIS Software, Inc.
("HSI"), a wholly-owned subsidiary of HALIS, in which
HALIS will receive 5,000,000 shares of Fisher Common
Stock ("HALIS Transaction"). The AUBIS and HALIS
transactions are subject to shareholder approval, and
upon consummation of these transactions, AHS, ASI and HSI
will be wholly-owned subsidiaries of Fisher and Fisher's
corporate name will be changed to AUBIS, Inc.
Under the terms of the AUBIS and HALIS Agreements, an
aggregate of 15,500,000 shares of Fisher Common stock
will be issued. As a result, upon consummation of the
these transactions, AUBIS and HALIS will own
approximately 46% and 22%, respectively, of the shares of
Fisher Common Stock to be outstanding upon consummation
of these transactions. In connection with these
transactions the Company has proposed to its stockholders
that the Articles of Incorporation be amended to increase
the number of authorized shares from 10,000,000 shares to
100,000,000 shares.
In February 1996, the Company entered into a Management
Agreement with the beneficial shareholder of AUBIS and
HALIS in which the shareholder will provide management
services to the Company in exchange for a monthly payment
of $10,000.
-35-
<PAGE> 37
FISHER BUSINESS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
10. MAJOR CUSTOMERS For year ended January 31, 1995, sales to one customer,
Friendly's Ice Cream, totalled approximately $378,000,
and accounted for 30% of the Company's sales. For year
ended January 31, 1995, sales to three customers; MCI,
Digital Equipment and Friendly's Ice Cream, totalled
approximately $3,128,000, and accounted for 58% of the
Company's sales.
-36-
<PAGE> 38
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
There has been no occurrence requiring a response to this Item.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following is a list of the Company's directors and executive
officers:
LARRY FISHER, age 52, the founder of the Company, has served as a director
since its organization in 1979, as President, Chief Executive Officer, and
Treasurer from 1979 to 1992 and, since December 1992, as Chairman of the Board.
Prior to 1979, Mr. Fisher was employed by IBM for 11 years in several
executive sales and marketing positions. In his last such position, Mr. Fisher
was responsible for creating, implementing and monitoring national marketing
programs for the retail and hospitality industries.
JAMES H. WHITMIRE, age 56, has served as President of Software
Manufacturing Group, Inc., a software company, since April 1994. Mr. Whitmire
served as a general manager of Broadway and Seymour, a software company, from
1992 to April 1994. Mr. Whitmire was elected to the Board of Directors in May
1987 and served as Executive Vice President of the Company from June 1991 to
September 1992, Vice President from August 1987 to June 1991, and Secretary
from 1988 to 1992. From October 1985 until April 1987, Mr. Whitmire was the
President, and from April 1987 to August 1987, the Senior Vice President, of
Medaphis Corporation, Atlanta, Georgia, a provider of claims processing and
management software and services to the health care industry. From November
1983 to October 1985, Mr. Whitmire was the President of RS Technology, Inc.,
Atlanta, Georgia, a restaurant software company which offered products similar
to the accounting and financial management software sold by the Company. Mr.
Whitmire also served as a member of the Board of Directors of Restaurant
Systems, Inc., the parent corporation of RS Technology, Inc., from 1983 to
1985.
JAMES W. DIXON, age 48, has served as President and Chief Executive
Officer of ClientLink Corporation, a provider of custom software and services,
since March 1996. Mr. Dixon served as Chairman of the Board of CompuCom
Systems, Inc. from 1989 to March 1996. From 1988 to 1989, he served as
President and Chief Operating Officer of CompuCom Systems. From 1987 to 1988,
he served as President of the CompuShop Division of Bell Atlantic, and from
1985 to 1987, he served as President of A Beeper Company, a Division of Bell
Atlantic. Mr. Dixon serves as a director of U.S. Data, Inc. Mr. Dixon was
elected to the Board of Directors of the Company in 1989. He was initially
nominated for election to the Board of Directors of the Company pursuant to an
agreement with the underwriter of the Company's initial public offering,
Pennsylvania Merchant Group Ltd, which agreement expired in 1991.
JAMES F. LYON, age 52, has served as Senior Vice President of USA
Enterprises, Inc., a provider of financial services and technology products to
colleges and universities, since June 1994. Mr. Lyon served as President and
Chief Executive Officer of the Company from February 1993 to June 1994, as
Executive Vice President of the Company from June 1991 to December 1992 and as
Chief
-37-
<PAGE> 39
Operating Officer from June 1991 to February 1993. From 1990 to June 1991,
Mr. Lyon served as President of People-Net, a vertical market information
services company. For 13 years prior to 1990, Mr. Lyon served in a variety of
executive roles with Information Associates, a business unit of Dun &
Bradstreet Software, including Vice President of Sales, Senior Vice President
of Regional Operations, Senior Vice President of Business Development and
Senior Vice President of Marketing.
JEFFREY C. BRENNER, age 46, has served as a director of the Company since
May 1995. Mr. Brenner is currently a private investor. From 1987 to 1991, Mr.
Brenner served as President and Chairman of the Board of Tech Time, Inc. a time
and attendance software/services company.
Paul W. Harrison and Nate Lipson have been nominated as directors of the
Company to be elected at the Company's 1996 Annual Meeting of Shareholders.
See "BUSINESS - Management and Operations of the Company upon Consummation of
the Transactions.
The AUBIS Agreement requires that two additional directors will be
appointed by the Board of Directors of the Company, one nominee to be selected
by Mr. Harrison and the other nominee to be jointly selected by Messrs. Fisher
and Harrison. It is anticipated that such board members will be identified and
elected as soon as practicable after consummation of the Transactions. Members
of the Board of Directors are elected annually to serve until the next annual
meeting of shareholders or until their successors are elected and qualified.
There are no family relationships between any director or executive
officer or any other director or executive officer of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than 10% of
the outstanding Common Stock of the Company, to file with the Securities and
Exchange Commission reports of changes in ownership of the Common Stock of the
Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all forms
they file under this regulation. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and
representations that no other reports were required, during the fiscal year
ended January 31, 1995, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% shareholders were complied with,
except as follows: Larry Fisher (failed to file on a timely basis two reports
relating to a total of two transactions); and Jeffrey C. Brenner (failed to
file on a timely basis two reports relating to a total of four transactions).
-38-
<PAGE> 40
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth certain summary information concerning
compensation paid, accrued or deferred by the Company to or on behalf of the
Company's Chief Executive Officer (hereinafter referred to as the "Named
Executive Officer") for the fiscal years ended January 31, 1996, 1995 and 1994.
The Named Executive Officer was the only executive officer to receive total
compensation in excess of $100,000 during the last fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
OTHER
NAME AND FISCAL ANNUAL STOCK
PRINCIPAL POSITION (1) YEAR SALARY BONUS COMPENSATION OPTIONS
- ---------------------- ------ -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Larry Fisher. . . . . . . 1996 $150,000 $18,000 (1) 650,000
Chairman of the 1995 150,000 - (1) -
Board, President and 1994 150,000 37,500 (1) 42,000
Chief Executive
Officer
</TABLE>
___________________
(1) The Company pays for an automobile allowance for Mr. Fisher, as well as
certain other perquisites. The aggregate amounts of these benefits do not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
during the past fiscal year for the Named Executive Officer.
DIRECTOR'S FEES
The Company does not presently pay any fees to directors but does
reimburse directors for reasonable out-of-pocket expenses incurred in
connection with attendance of meetings of the Board of Directors. The Company
has granted certain non-qualified stock options to its non-employee directors
and in April 1996, the Board of Directors of the Company adopted a 1996 Stock
Option Plan pursuant to which each of the Company's outside directors will
receive an automatic annual grant of options to purchase 10,000 shares of
Fisher Common Stock on the second Tuesday in June of each year during the term
of the Plan. The 1996 Stock Option Plan is subject to approval of the
shareholders of the Company at the Company's 1996 Annual Meeting of
Shareholders.
EMPLOYMENT AGREEMENT
The Company has entered into an Employment Agreement with Larry Fisher,
pursuant to which Mr. Fisher serves as Chairman of the Board, President and
Chief Executive Officer of the Company. The Employment Agreement was amended in
February 1996 in contemplation of the AUBIS Transaction. Upon consummation of
the AUBIS Transaction, Mr. Fisher will relinquish his titles as Chairman of the
Board and Chief Executive Officer of the Company, but will continue to serve as
its President and Chief
-39-
<PAGE> 41
Operating Officer. The Employment Agreement, as amended, is for a term
of three years, expiring on December 31, 1998, and provides for an annual base
salary of $175,000 plus incentive bonus payments. In addition, the Employment
Agreement provides for Mr. Fisher to receive options to purchase shares of the
Company Common Stock in the discretion of the Board of Directors. The
Employment Agreement provides for certain severance payments to be paid to Mr.
Fisher in the event of a change in control of Fisher (exclusive of the
Transactions) or a significant change in Mr. Fisher's operational duties. In
the event of a change in control, Mr. Fisher will be entitled to terminate his
employment with the Company and to receive two times his annual base salary plus
twice the cost for one year of all additional benefits provided to Mr. Fisher
under the Employment Agreement. In addition, in the event Mr. Fisher terminates
his employment under certain stated conditions or is terminated by the Company
without cause, he will receive the greater of one year's annual base salary or
an amount equal to the base salary which would otherwise be payable to Mr.
Fisher for the remaining term of his Employment Agreement. Any such severance
payments may, at the option of the Company, be paid to Mr. Fisher in equal
monthly installments or in a lump sum at a discounted present value. The
Employment Agreement contains non-compete and non-solicitation provisions,
effective through the actual date of termination of the Employment Agreement and
for a period of two years thereafter.
STOCK OPTIONS
The following table provides certain information concerning individual
grants of stock options made during the fiscal year ended January 31, 1996 to
the Named Executive Officer:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------------------------------
% OF TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN FISCAL BASE PRICE EXPIRATION
NAME (#) YEAR ($ PER SHARE) DATE
----- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Larry Fisher........... 650,000(1) 100% $.25 5/04/05
</TABLE>
(1) Consists entirely of non-qualified stock options granted to Mr. Fisher
pursuant to his employment agreement.
-40-
<PAGE> 42
The following table provides certain information concerning the value of
unexercised options held by the Named Executive Officer as of January 31, 1996.
No stock options were exercised by the Named Executive Officer during fiscal
1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT YEAR-END AT YEAR-END
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ------------------------- ----------------------------
<S> <C> <C>
Larry Fisher ....................... 750,000 / 0 $1,572,500/ $0
</TABLE>
___________________________
(1) Dollar values calculated by determining the difference between the
estimated fair market value of the Company's Common Stock at January 31,
1996 ($2.38) and the exercise price of such options.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information regarding the beneficial
ownership of the Company Common Stock of the Company, as of March 15, 1996, by
(i) those persons or entities known by management of the Company to own
beneficially more than 5% of the Company Common Stock, (ii) each of the
directors and director nominees of the Company, and (iii) all directors and
executive officers of the Company as a group. Unless otherwise indicated in
the footnotes to the table, the persons or entities listed below have sole
voting and investment power with respect to the shares of the Company Common
Stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
NAME OF BENEFICIALLY PERCENT
OWNED (1) OF CLASS
------------ --------
<S> <C> <C>
Larry Fisher ...................... 1,678,500(2) 20.6%
Jeffrey C. Brenner ................ 1,925,800(3) 25.8
James W. Dixon .................... 10,440(4) *
James F. Lyon ..................... 182,800(5) 2.5
James H. Whitmire ................. 8,110(6) *
Paul W. Harrison .................. 50,000(7)(8) *
Nate Lipson ....................... 50,000(9) *
Joe Arnold ........................ 533,333(9) 7.2
Ronald G. Brenner ................. 500,000(10) 6.8
K. Brett Thackston ................ 543,175(11) 7.4
Broadland Capital Partners, L.P. .. 543,175(12) 7.4
Directors and executive officers
as a group (5 persons) ............3,805,650 46.0
</TABLE>
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<PAGE> 43
* Less than 1% of outstanding shares.
______________________________
(1) "Beneficial Ownership" includes shares for which an individual, directly
or indirectly, has or shares voting or investment power or both and also
includes options which are exercisable within sixty days of the date of
this Report. All of the listed persons have sole voting and investment
power over the shares listed opposite their names unless otherwise
indicated in the notes below. Beneficial ownership as reported in the
above table has been determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934. The percentages are based upon 7,363,696
shares outstanding, except for certain parties who hold presently
exercisable options to purchase shares. The percentages for those parties
who hold presently exercisable options or convertible securities are based
upon the sum of 7,363,696 shares plus the number of shares subject to
presently exercisable options or convertible securities held by them, as
indicated in the following notes.
(2) Includes 750,000 shares subject to presently exercisable stock options and
50,000 shares of Common Stock issuable upon the conversion of outstanding
convertible promissory notes. Includes 751,500 shares owned individually
by Mr. Fisher and 127,000 shares held as custodian for a minor child. Mr.
Fisher's business address is 1950 Spectrum Circle, Suite 400, Marietta,
Georgia 30067.
(3) Includes 100,800 shares subject to presently exercisable stock options.
Mr. Brenner's address is 3581 Sarasota Golf Club Boulevard, Sarasota,
Florida 34240.
(4) Includes 4,440 shares subject to presently exercisable stock options.
(5) Includes 800 shares subject to presently exercisable stock options.
(6) Includes 2,400 shares of Common Stock subject to presently exercisable
stock options.
(7) Consists of shares of Common Stock issuable upon the conversion of
outstanding convertible promissory notes.
(8) Upon consummation of the Transactions, Mr. Harrison will also
beneficially own all 15,500,000 shares of Common Stock issued in the
Transactions, which will represent 68% of the issued and outstanding
shares of Common Stock.
(9) Mr. Arnold's address is 7117 Harborside 1, Hilton Head, South Carolina
29928.
(10) Mr. Brenner's address is 8403 Estero Boulevard, #302, Fort Myers Beach,
Florida 33931.
(11) Mr. Thackston's address is 4605 Whitewater Creek Road, Atlanta, Georgia
30327.
(12) Broadland Capital Partners, L.P.'s address is P.O. Box 2527, Ponte Vedra
Beach, Florida 32044.
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<PAGE> 44
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with the Transactions, the Company will issue 10,500,000
shares of the Company Common Stock to AUBIS and 5,000,000 shares of the Company
Common Stock to HALIS. Paul W. Harrison, a director nominee of the Company,
serves as the managing member of both AUBIS and HALIS and beneficially owns
23.0% and 49.5% respectively, of the two companies.
In January 1996, the Company entered into a letter of intent to acquire a
proprietary technology asset ("MERAD") for $200,000 in cash from Paul Harrison
Enterprises, Inc. ("PHE"), of which $50,000 will be paid in cash at the closing
of the transaction and $150,000 will be evidenced by a 12-month promissory note
bearing interest at 10% per annum. In addition, the Company is obligated to
pay 10% of the gross revenues generated from the MERAD technology and any
derivations thereof by the Company or any of its affiliates. It is anticipated
that this transaction will be consummated on the later to occur of August 1,
1996 or the consummation date of the Transactions. Mr. Harrison serves as the
President of PHE and beneficially owns 53.3% of this company.
In February 1996, the Company entered into a Management Agreement with
AUBIS pursuant to which Mr. Harrison provides management services to the
Company in an effort to begin the process of effecting an orderly transition of
the AUBIS Subsidiaries to the Company. The Management Agreement provides for a
monthly management fee of $10,000 payable to AUBIS and is terminable at the
option of either the Company or AUBIS by five business days' notice to the
other party.
In February 1996, the Company entered into a Marketing Agreement with AHS
pursuant to which AHS distributes the Fisher Restaurant Management System(TM).
Pursuant to this agreement, the Company has advanced AHS $80,000, which is to
be repaid out of gross sales commissions to be earned by AHS from the sale of
such systems. AHS is a wholly-owned subsidiary of AUBIS, which is controlled
by Mr. Harrison.
On March 25, 1994, the Company consummated the sale of its object
libraries and certain other assets related to its client/server software
business. These business assets were sold to CompuCom Acquisition Corp. of
Texas, an affiliate of CompuCom Systems, Inc., of which James W. Dixon, a
director of the Company, is Chairman of the Board and Chief Executive Officer.
The assets sold included certain computer software object libraries, certain
furniture, fixtures and equipment, customer lists, intellectual property and
licenses. The purchaser paid $250,000 in cash at closing and assumed the
obligations under certain purchase orders and contracts. The sale price was
determined through negotiations between the Company and CompuCom Systems, Inc.
As part of the asset purchase, the Company entered into a non-competition
agreement with the purchaser, agreeing for a period of three years not to
engage in any business in the states in which the Company was doing business
immediately prior to closing that would be deemed to be in competition with the
business being acquired by the purchaser. In addition, the Company entered
into a consulting agreement with the purchaser to provide consulting services
for a period of one year after closing for a total consideration of $50,000.
During a portion of fiscal 1995, the Company's headquarters were located
in 13,000 square feet of office space in a modern office building located in
Marietta, Georgia. The office space was leased under an agreement for a term
of 5 1/2 years expiring in 1993, for an effective annual base rent of
approximately $174,000. This office building is owned by Merchant's Station
Limited Partnership, a Georgia limited partnership in which the Company owned a
10% limited partner interest. The lease
-43-
<PAGE> 45
agreement between the Company and the partnership was negotiated on
terms which are at least as favorable to the Company as might be obtained by an
unaffiliated third party in similar circumstances.
Because of recent personnel reductions, and in an effort to reduce costs,
the Company agreed with representatives of Merchant's Station Limited
Partnership to reduce to approximately 3,000 square feet the amount of space
leased by the Company, which lowered its effective annual base rent to
approximately $60,000, effective July 1, 1994. As a condition to such
agreement for reduction with Merchant's Station Limited Partnership, the
Company transferred its 10% ownership interest back to Merchant's Station
Limited Partnership without further consideration. The Company vacated this
space in August 1994 and has no further obligation to Merchant's Station
Limited Partnership.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
The following exhibits are filed with or incorporated by reference into
this report. The exhibits which are denominated by an asterisk (*) were
previously filed as a part of, and are hereby incorporated by reference from
either (i) a Registration Statement on Form S-18 under the Securities Act of
1933 for the Registrant, Registration No. 33-14114-A, initially filed with the
Securities and Exchange Commission on May 7, 1987, as amended ("S-18"); (ii)
the Annual Report on Form 10-K for the year ended January 31, 1988 ("1988
10-K"); (iii) a Registration Statement on Form S-1, Registration No. 33-25250,
initially filed with the Securities and Exchange Commission on November 2,
1988, as amended ("S-1"); (iv) the Quarterly Report on Form 10-Q for the
quarter ended July 31, 1989 ("7/31/89 10-Q"); (v) the Annual Report on Form
10-K for the year ended January 31, 1990 ("1990 10-K"); (vi) the Annual Report
on Form 10-K for the year ended January 31, 1991 ("1991 10-K"); or (vii) the
Annual Report on Form 10-K for the year ended January 31, 1992 ("1992 10-K");
(viii) the Annual Report on Form 10-K for the year ended January 31, 1993
("1993 10-K"); (ix) the Current Report on Form 8-K dated March 25, 1994
("8-K"); and (x) the Annual Report on Form 10-K for the year ended January 31,
1995 ("1995 10-K").
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ---------------------------------
<S> <C>
*2.1 Asset Purchase and Sale Agreement, dated March 25, 1994, by and among
Fisher Business Systems, Inc. and CompuCom Acquisition Corp. of Texas
(8-K, Exhibit 2.1).
2.2 Amended and Restated Agreement and Plan of Merger and Reorganization,
dated as of December 13, 1995 and amended and restated as of March 29,
1996, among Fisher Business Systems, Inc., AUBIS, L.L.C., AUBIS
Hospitality Systems, Inc., AUBIS Systems Integration, Inc. and certain
persons and affiliates of AUBIS, L.L.C.
*3.1.1 Articles of Incorporation, as amended (S-18, Exhibit 3.1)
*3.1.2 Articles of Amendment filed December 1, 1992 (1993 10-K, Exhibit
3.1.2)
*3.1.3 Articles of Amendment filed June 30, 1995 (1995 10-K)
</TABLE>
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<PAGE> 46
<TABLE>
<S> <C>
* 3.2 By-laws, as amended (S-18, Exhibit 3.2)
* 4.1 Form of Common Stock Certificate (S-18, Exhibit 4.1)
*10.1 IBM Value Added Dealer Agreement (S-18, Exhibit 10.4)
*10.2 Form of Restaurant Management System License Agreement (S-18, Exhibit 10.7)
*10.3 Form of Server Entry System License Agreement (S-18, Exhibit 10.8)
*10.4 Value Added Dealer Agreement dated November 1, 1986 between the Company and Alloy Computer Products, Inc. (S-18, Exhibit
10.18)
*10.5 Form of Employee Trade Secret Agreement (S-18, Exhibit 10.19)
*10.6 1986 Incentive Stock Option Plan (S-18, Exhibit 10.20)
*10.6.1 Amendments No. 1 and No. 2 to 1986 Incentive Stock Option Plan (1988 10-K, Exhibit 10.14.1)
*10.6.2 Amendment No. 3 to 1986 Incentive Stock Option Plan (1990 10-K, Exhibit 10.12.2)
*10.6.3 Amendment No. 4 to 1986 Incentive Stock Option Plan (1991 10-K, Exhibit 10.7.3)
*10.6.4 Amendment No. 5 to 1986 Incentive Stock Option Plan (1992 10-K, Exhibit 10.7.4)
*10.7 1988 Non-Qualified Stock Option Plan (1988 10-K, Exhibit 10.15)
*10.7.1 Amendment No. 1 to 1988 Non-Qualified Stock Option Plan (1990 10-K, Exhibit 10.13.1)
*10.7.2 Amendment No. 2 to 1988 Non-Qualified Stock Option Plan (1992 10-K, Exhibit 10.8.2)
*10.8 Lease Agreement dated August 1987 between the Company and Merchant's Station Limited Partnership (1988 10-K, Exhibit 10.16)
*10.9.1 Revised Form of Purchase and License Agreement (1992 10-K, Exhibit 10.10.1)
*10.10 Revised Form of Warranty Registration Form and License Agreement (1988 10-K, Exhibit 10.18)
*10.11 Trademark Registration - Fisher Business Systems\ (S-1, Exhibit 10.19)
</TABLE>
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<PAGE> 47
<TABLE>
<S> <C>
*10.12 Service Mark Registration - Fisher Restaurant Management System(R) (S-1, Exhibit 10.20)
*10.14 401(k) Plan of Registrant adopted January 1, 1991 (1991 10-K, Exhibit 10.16)
*10.17 Employment Agreement dated May 8, 1995 by and between Fisher Business Systems, Inc. and Larry Fisher (1995 10-K)
10.18 Employment Agreement dated February 7, 1996 by and between Fisher Business Systems, Inc. and Larry Fisher.
10.19 Stock Purchase Agreement, dated as of March 29, 1996, between Fisher Business Systems, Inc., HALIS, L.L.C., Paul W.
Harrison, Lonnie Herzog and James Askew.
10.20 1996 Stock Option Plan of the Company
23.1 Consent of BDO Seidman
24.1 Powers of Attorney
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
(b) Reports on Form 8-K.
The following report on Form 8-K was filed during the fourth quarter of
the fiscal year ended January 31, 1996: Current Report on Form 8-K dated
December 13, 1995.
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<PAGE> 48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FISHER BUSINESS SYSTEMS, INC.
Date: April 24, 1996 By: /s/ Larry Fisher
-----------------------------------
Larry Fisher, President and
Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Date
--------- ----
<S> <C>
/s/ Larry Fisher April 24, 1996
- -----------------------------
Larry Fisher
Chairman, President and Chief
Executive Officer
April __, 1996
- -----------------------------
James F. Lyon
Director
April __, 1996
- -----------------------------
James H. Whitmire
Director
* April 24, 1996
- -----------------------------
James W. Dixon
Director
* April 24, 1996
- -----------------------------
Jeffrey C. Brenner
*By: /s/ Larry Fisher
------------------------------------
Larry Fisher, as attorney-in-fact
</TABLE>
<PAGE> 49
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
- ------ ----------------------------------- -----------
<S> <C>
2.2 Amended and Restated Agreement and
Plan of Merger and Reorganization,
dated as of December 13, 1995 and
amended and restated as of March 29,
1996, among Fisher Business Systems,
Inc., AUBIS, L.L.C., AUBIS
Hospitality Systems, Inc., AUBIS
Systems Integration, Inc. and certain
persons and affiliates of AUBIS,
L.L.C.
10.18 Employment Agreement dated February
7, 1996 by and between Fisher
Business Systems, Inc. and Larry
Fisher
10.19 Stock Purchase Agreement, dated as of
March 29, 1996, between Fisher
Business Systems, Inc., HALIS,
L.L.C., Paul W. Harrison, Lonnie
Herzog and James Askew.
10.20 1996 Stock Option Plan of the Company
23.1 Consent of BDO Seidman
24.1 Powers of Attorney
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
EXHIBIT 2.2
<PAGE> 2
===============================================================================
AMENDED AND RESTATED AGREEMENT AND
PLAN OF MERGER AND REORGANIZATION
among:
FISHER BUSINESS SYSTEMS, INC., a Georgia corporation,
and
AUBIS, L.L.C., a Georgia limited liability company,
and
AUBIS HOSPITALITY SYSTEMS, INC. , a Georgia corporation,
and
AUBIS SYSTEMS INTEGRATION, INC., a Georgia corporation,
and
CERTAIN PERSONS AND AFFILIATES OF AUBIS, L.L.C.
_________________________
Originally Dated as of December 13, 1995
Amended and Restated as of March 29, 1996
_________________________
===============================================================================
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 1. DESCRIPTION OF TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1 Merger of Companies into Merger Subs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.2 Effect of Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.3 Closing; Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.4 Articles of Incorporation and Bylaws; Directors and Officers. . . . . . . . . . . . . . . . . . . . 7
1.5 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.6 Closing of the Companies' Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.7 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.8 Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.9 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2. REPRESENTATIONS AND WARRANTIES OF THE PARENT, THE COMPANIES AND THE
DESIGNATED PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Due Organization; No Subsidiaries; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Articles of Incorporation and Bylaws; Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Capitalization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.7 Bank Accounts; Receivables; Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Equipment; Leasehold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.9 Proprietary Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.10 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.11 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.12 Compliance with Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.13 Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.14 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.15 Employee and Labor Matters; Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.17 Sale of Products; Performance of Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.19 Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.20 Legal Proceedings; Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.21 Authority; Binding Nature of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.22 Non-Contravention; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.23 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3. REPRESENTATIONS AND WARRANTIES OF FISHER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Authority; Binding Nature of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Valid Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 Merger Subs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4. CERTAIN COVENANTS OF THE COMPANIES, THE PARENT AND THE DESIGNATED PERSONS . . . . . . . . . . . . . 23
4.1 Access and Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2 Operation of the Companies' Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3 Notification; Updates to Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
-2-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
4.4 No Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.5 Due Diligence Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5. CERTAIN COVENANTS OF FISHER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Access and Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Operation of Fisher's Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.3 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.4 No Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.5 Due Diligence Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6. ADDITIONAL COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.1 Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Proxy Statement; Other Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.3 Shareholders' Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.4 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.5 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.6 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.7 Termination of Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.8 FIRPTA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.9 Conversion of Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF FISHER . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.1 Accuracy of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 Agreements and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.6 Termination of Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 FIRPTA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.8 Rule 506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.9 No Restraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 No Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 Fisher Shareholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.12 Related Party Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.13 Investment Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.14 HALIS Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARENT, THE COMPANIES AND THE
DESIGNATED PERSONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Accuracy of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 Agreements and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5 Fisher Shareholder Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.6 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7 No Restraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.8 No Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.9 Related Party Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.10 Fisher's Financial Condition Immediately Prior to Closing . . . . . . . . . . . . . . . . . . . . . 32
8.11 HALIS Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.12 Compucom Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Section 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Termination Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10. INDEMNIFICATION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.1 Indemnification by the Parent and the Designated Persons. . . . . . . . . . . . . . . . . . . . . . 34
10.2 Indemnification by Fisher and the Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . 34
10.3 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.4 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 11. REGISTRATION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3 Delay of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.4 Amendment of Section 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 12. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.1 Designated Persons' Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.2 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.7 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.10 Governing Law; Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.12 Remedies Cumulative; Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.13 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.14 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.16 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.17 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.18 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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<PAGE> 6
EXHIBITS
Exhibit A - Designated Persons
Exhibit B - Certain definitions
Exhibit C - Directors and officers of Surviving Corporation
Exhibit D - Related Party Debt
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<PAGE> 7
AMENDED AND RESTATED AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION ("Agreement") is made and entered into as of March 29, 1996, by
and among: FISHER BUSINESS SYSTEMS, INC., a Georgia corporation ("Fisher");
AUBIS, L.L.C., a Georgia limited liability company ("Parent"); AUBIS HOSPITALITY
SYSTEMS, INC. , a Georgia corporation and a wholly-owned subsidiary of the
Parent ("AHS"); AUBIS SYSTEMS INTEGRATION, INC., a Georgia corporation and a
wholly-owned subsidiary of the Parent ("ASI") (AHS and ASI are hereinafter
sometimes referred to collectively as the "Companies"), and the parties
identified on Exhibit A (the "Designated Persons"). Certain capitalized terms
used in this Agreement are defined in Exhibit B.
RECITALS
A. Fisher, Parent and the Companies entered into an Agreement and
Plan of Merger and Reorganization dated as of December 13, 1995 (the "Original
Agreement") which contemplated a merger of the Companies into Fisher in
accordance with the Georgia Business Corporation Code, in which Fisher would
continue to exist as the surviving corporation of such merger.
B. The parties have subsequently agreed that it is in their
mutual best interest to restructure the transactions contemplated in the
Original Agreement as two separate mergers of the Companies into two newly
created wholly owned subsidiaries of Fisher.
C. The parties wish to amend and restate the Original Agreement
to reflect the revised structure of the mergers and to incorporate certain
additional terms as provided herein.
D. It is intended that the mergers continue to qualify as a
tax-free reorganization within the meaning of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
E. This Amended and Restated Agreement has been adopted and
approved by the respective boards of directors of Fisher, and the Companies and
the members of Parent.
F. The Parent owns a total of (i) 1,126 shares of the voting
common stock, $1.00 par value per share, of AHS, representing 100% of the
issued and outstanding stock of AHS, and (ii) 14,288 shares of the voting
common stock, no par value per share, of ASI, representing 100% of the issued
and outstanding stock of ASI (collectively, the "Companies Common Stock.")
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<PAGE> 8
AGREEMENT
The parties to this Agreement agree as follows:
Section Section 1. DESCRIPTION OF TRANSACTION
1.1 MERGER OF COMPANIES INTO MERGER SUBS. Prior to the
Closing, Fisher shall cause to be incorporated and organized two wholly owned
subsidiaries of Fisher (collectively, the "Merger Subs", or each individually,
a "Merger Sub"). Prior to the Closing, Fisher shall transfer to one or both of
the Merger Subs certain of Fisher's assets, and one or both of the Merger Subs
shall assume substantially all of Fisher's liabilities, all in a manner that is
reasonably satisfactory in form and substance to Parent. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time
(as defined in Section 1.3) AHS shall be merged into one of the Merger Subs and
ASI shall be merged into the other Merger Sub, and the separate existence of
the Companies shall cease (the two mergers of the respective Companies into the
respective Merger Subs shall be referred to hereinafter as the "Mergers"). The
respective Merger Subs shall be the surviving corporations in the Mergers (the
"Surviving Corporations").
1.2 EFFECT OF MERGERS. The Mergers shall have the effects
set forth in this Agreement and in the applicable provisions of the Georgia
Business Corporation Code. Prior to closing, Fisher shall cause the Merger Subs
to enter into this Agreement by addendum whereby each of the Merger Subs adopts
the terms and conditions of the Mergers contained herein.
1.3 CLOSING; EFFECTIVE TIME. The consummation of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Smith, Gambrell & Russell, 3343 Peachtree Road, Suite 1800,
Atlanta, Georgia 30326, at 10:00 a.m. local time on the first business day
which is two (2) days after the date Fisher's shareholders shall have ratified
the Mergers, or at such other time and date as the parties shall designate (the
"Scheduled Closing Time"). (The date on which the Closing actually takes place
is referred to in this Agreement as the "Closing Date.") Contemporaneously with
or as promptly as practicable after the Closing, but in no event later than one
business day after the Closing, properly executed certificates of merger for
the mergers of ASI and AHS into the respective Merger Subs, conforming to the
requirements of the Georgia Business Corporation Code, shall be filed with the
Secretary of State of the State of Georgia. The Mergers shall take effect at
the time the last such certificates of merger are filed with the Secretary of
State of the State of Georgia (the "Effective Time").
1.4 ARTICLES OF INCORPORATION AND BYLAWS; DIRECTORS AND
OFFICERS. Unless the parties agree otherwise prior to the Effective Time:
(a) the Articles of Incorporation of the respective
Merger Subs shall continue as the Articles of Incorporation of the
Surviving Corporations;
(b) the respective Bylaws of the Merger Subs shall
continue as the respective Bylaws of the Surviving Corporations
(provided that any amendments reasonably required to carry into effect
the purposes of this Agreement also may be made);
(c) simultaneously with the Closing, the Articles of
Incorporation of Fisher shall be amended and restated to:
(i) change the name of Fisher to AUBIS, Inc; and
(ii) increase authorized common stock to
100,000,000 shares;
(d) the directors and officers of Fisher and the
Surviving Corporations immediately after the Effective Time shall
be the individuals identified on Exhibit C; and
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<PAGE> 9
(e) immediately following the Closing,
Fisher's Board of Directors shall cause the number of seats on such
Board to increase from 5 members to 7 members. As soon as practicable
after the Closing, Fisher's Board of Directors shall elect two
members to fill the newly created vacancies, one of whom shall be a
mutual nominee of Larry Fisher and Paul Harrison, the other of whom
shall be a nominee of Paul Harrison.
1.5 CONVERSION OF SHARES.
(a) Subject to Sections 1.7(b),
at the Effective Time, by virtue of the Mergers and without any further action
on the part of Fisher, Parent, the Companies, the Merger Subs or any Designated
Person, all of the Companies Common Stock outstanding immediately prior to the
Effective Time shall be canceled and retired and converted into the right to
receive 10,500,000 shares of $.01 par value common stock of Fisher ("Fisher
Common Stock") (the "Merger Consideration").
(b) If any shares of Companies
Common Stock outstanding immediately prior to the Effective Time are unvested
or are subject to a repurchase option, risk of forfeiture or other condition
under any restricted stock purchase agreement or other agreement with the
Companies, then the shares of Fisher Common Stock issued in exchange for such
shares of Companies Common Stock will be unvested and subject to the same
repurchase option, risk of forfeiture or other condition, and the certificates
representing such shares of Fisher Common Stock may accordingly be marked with
appropriate legends.
1.6 CLOSING OF THE COMPANIES' TRANSFER BOOKS. At the
Effective Time, the holders of certificates representing shares of Companies
Common Stock that were outstanding immediately prior to the Effective Time
shall cease to have any rights as shareholders of the Companies, and the stock
transfer books of the Companies shall be closed with respect to all shares of
such Companies Common Stock outstanding immediately prior to the Effective
Time. No further transfer of any such shares of the Companies' capital stock
shall be made on such stock transfer books after the Effective Time. If, after
the Effective Time, a valid certificate previously representing any of such
shares of Companies Common Stock (a "Company Stock Certificate") is presented
to Fisher, such Company Stock Certificate shall be canceled and shall be
exchanged as provided in Section 1.7.
1.7 EXCHANGE OF CERTIFICATES.
(a) At or as soon as practicable
following the Effective Time, each shareholder of record of the Companies shall
surrender its respective Company Stock Certificate(s) to the Fisher, together
with such transmittal documents as Fisher may reasonably require, and Fisher
shall deliver to such shareholders of record of the Companies a certificate or
certificates representing the number of shares of Fisher Common Stock issuable
pursuant to Section 1.5 in respect of the Companies Common Stock represented by
the surrendered Company Stock Certificate(s).
(b) Until surrendered as
contemplated by this Section 1.7, each Company Stock Certificate shall be
deemed, from and after the Effective Time, to represent only the right to
receive shares of Fisher Common Stock as contemplated by this Section 1.7. If
any Company Stock Certificate shall have been lost, stolen or destroyed, Fisher
may, in its discretion and as a condition precedent to the issuance of any
certificate representing Fisher Common Stock, require the owner of such lost,
stolen or destroyed Company Stock Certificate to provide an appropriate
affidavit and to deliver a bond (in such sum as Fisher may reasonably direct)
as indemnity against any claim that may be made against Fisher with respect to
such Company Stock Certificate.
(c) The shares of Fisher Common
Stock to be issued in the Mergers shall be characterized as "restricted
securities" for purposes of Rule 144 under the Securities Act, and each
certificate representing any of such shares shall bear a legend identical or
similar in effect to the following legend (together with any other legend or
legends required by applicable state securities laws or otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED
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<PAGE> 10
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
(d) Fisher shall be entitled to
deduct and withhold from any consideration payable or otherwise deliverable to
any holder or former holder of Companies Common Stock pursuant to this
Agreement such amounts as Fisher may be required to deduct or withhold
therefrom under the Code or under any provision of state, local or foreign tax
law. To the extent such amounts are so deducted or withheld, such amounts shall
be treated for all purposes under this Agreement as having been paid to the
Person to whom such amounts would otherwise have been paid.
(e) Fisher shall not be liable
to any holder or former holder of Companies Common Stock for any shares of
Fisher Common Stock (or dividends or distributions with respect thereto), or
for any cash amounts, delivered to any public official pursuant to any
applicable abandoned property, escheat or similar law.
1.8 TAX CONSEQUENCES. For federal income tax purposes, the
Mergers are intended to constitute a reorganization within the meaning of
Section 368 of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
1.9 FURTHER ACTION. If, at any time after the Effective
Time, any further action is determined by Fisher to be necessary or desirable
to carry out the purposes of this Agreement or to vest the Merger Subs with
full right, title and possession of and to all rights and property of the
Companies, the officers and directors of Fisher shall be fully authorized (in
the name of the Companies and otherwise) to take such action.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE PARENT,
THE COMPANIES AND THE DESIGNATED PERSONS
The Companies, the Parent and the Designated Persons jointly
and severally represent and warrant, to and for the benefit of Fisher and the
Merger Subs, as follows (for purposes of this Section 2, unless the context
indicates otherwise, a reference to the "Companies" in the plural shall mean
each of the Companies individually), as of the date hereof and as of the
Closing Date:
2.1 DUE ORGANIZATION; NO SUBSIDIARIES; ETC.
(a) The Companies are
corporations duly organized, validly existing and in good standing under the
laws of the State of Georgia and have all necessary power and authority: (i) to
conduct their businesses in the manner in which their businesses are currently
being conducted and in the manner in which their businesses are proposed to be
conducted; (ii) to own and use their assets in the manner in which their assets
are currently owned and used and in the manner in which their assets are
proposed to be owned and used; and (iii) to perform their obligations under all
Contracts by which they are bound.
(b) The Companies have not
conducted any business under or otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name, trade name or other name,
other than the names "AUBIS Hospitality Systems, Inc." f/k/a "Wiporwil Systems,
Inc." f/d/b/a "Dynamic Decisions", with respect to AHS, and "AUBIS Systems
Integration, Inc." f/k/a "G.E. Random & Associates, Inc." f/d/b/a "Peripheral
Design", with respect to ASI.
(c) The Companies are not
and have not been required to be qualified, authorized, registered or licensed
to do business as foreign corporations in any jurisdiction other than the
jurisdictions identified in Part 2.1(c) of the Disclosure Schedule, except where
the failure to be so qualified, authorized, registered or licensed has not had
and will not have a Material Adverse Effect on the Companies. The Companies are
in good standing as foreign corporations in each of the jurisdictions identified
in Part 2.1(c) of the Disclosure Schedule.
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<PAGE> 11
(d) Part 2.1(d) of the
Disclosure Schedule accurately sets forth (i) the names of the members of the
Companies' boards of directors, (ii) the names of the members of each committee
of the Companies' boards of directors, and (iii) the names and titles of the
Companies' officers.
(e) Except as set forth in Part
2.1(e) of the Disclosure Schedule, the Companies have no subsidiaries, and have
never owned, beneficially or otherwise, any shares or other securities of, or
any direct or indirect interest of any nature in, any other Entity.
2.2 ARTICLES OF INCORPORATION AND BYLAWS; RECORDS. The
Companies have delivered to Fisher accurate and complete copies of: (i) the
Companies' articles of incorporation and bylaws, including all amendments
thereto; (ii) the stock records of the Companies; and (iii) the minutes and
other records of the meetings and other proceedings (including any actions
taken by written consent or otherwise without a meeting) of the shareholders of
the Companies, the boards of directors of the Companies and all committees of
the boards of directors of the Companies. There have been no meetings or other
proceedings or actions of the shareholders of the Companies, the boards of
directors of the Companies or any committee of the boards of directors of the
Companies that are not fully reflected in such minutes or other records. There
has not been any violation of any of the provisions of the Companies' articles
of incorporation or bylaws or of any resolution adopted by the Companies'
shareholders, the Companies' boards of directors or any committee of the
Companies' boards of directors. The books of account, stock records, minute
books and other records of the Companies are accurate, up-to-date and complete,
and have been maintained in accordance with prudent business practices and all
applicable Legal Requirements.
2.3 CAPITALIZATION, ETC.
(a) The authorized capital stock
of AHS consists of 100,000 shares of common stock, of which 1,126 shares have
been issued and are outstanding. There are no shares of capital stock held in
AHS's treasury. Part 2.3(a) of the Disclosure Schedule sets forth the names of
AHS's shareholders and the number of shares of AHS common stock owned of record
by each of such shareholders. All of the outstanding shares of AHS common stock
have been duly authorized and validly issued, and are fully paid and
non-assessable, and none of such shares is subject to any repurchase option or
restriction on transfer.
(b) The authorized capital stock
of ASI consists of 100,000 shares of common stock, of which 14,288 shares have
been issued and are outstanding. There are no shares of capital stock held in
ASI's treasury. Part 2.3(b) of the Disclosure Schedule sets forth the names of
ASI's shareholders and the number of shares of ASI common stock owned of record
by each of such shareholders. All of the outstanding shares of ASI common stock
have been duly authorized and validly issued, and are fully paid and
non-assessable, and none of such shares is subject to any repurchase option or
restriction on transfer.
(c) There is no: (i) outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire, or otherwise relating to, any shares of the capital
stock or other securities of the Companies; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of the Companies; (iii)
Contract under which the Companies are or may become obligated to sell or
otherwise issue any shares of their capital stock or any other securities; or
(iv) condition or circumstance that may give rise to or provide a basis for the
assertion of a claim by any Person to the effect that such Person is entitled
to acquire or receive any shares of capital stock or other securities of the
Companies. Except as set forth in Part 2.3(c) of the Disclosure Schedule, the
Companies have never issued or granted any option, call, warrant or right to
acquire, or otherwise relating to, any shares of their capital stock or other
securities.
(d) All outstanding shares of
Companies Common Stock have been issued in compliance with (i) all applicable
securities laws and other applicable Legal Requirements, and (ii) all
requirements set forth in applicable Contracts.
(e) Except as set forth in Part
2.3(e) of the Disclosure Schedule, the Companies have never repurchased,
redeemed or otherwise reacquired any shares of capital stock or other
securities. All securities so
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<PAGE> 12
reacquired by the Companies were reacquired in compliance with (i) the
applicable provisions of the Georgia Business Corporation Code and all other
applicable Legal Requirements, and (ii) any requirements set forth in applicable
Contracts.
2.4 FINANCIAL STATEMENTS.
(a) The Companies will within
five days after the restatement date of this Agreement deliver to Fisher the
audited combined balance sheets of AHS and ASI as of December 31, 1995 and the
related audited combined statements of income of AHS for the year then ended
and the accompanying report of Habif, Arogetti & Wynne, P.C., independent
certified public accountants to the Companies (collectively, the "Company
Financial Statements").
(b) The Company Financial
Statements are accurate and complete in all material respects and present
fairly the financial position of the Companies as of the respective dates
thereof and the results of operations of the Companies for the periods covered
thereby. The Company Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered (except that the Company Financial Statements do
not contain footnotes.
2.5 ABSENCE OF CHANGES. Except as set forth in Part 2.5
of the Disclosure Schedule, since December 31, 1995.
(a) there has not been any
material adverse change in the Companies' business, condition, assets,
liabilities, operations, financial performance or prospects, and no event has
occurred that will, or could reasonably be expected to, have a Material Adverse
Effect on the Companies;
(b) there has not been any
material loss, damage or destruction to, or any material interruption in the
use of, any of the Companies' assets (whether or not covered by insurance);
(c) the Companies have not
declared, accrued, set aside or paid any dividend or made any other
distribution in respect of any shares of capital stock, and have not
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities;
(d) the Companies have not sold,
issued or authorized the issuance of (i) any capital stock or other security,
(ii) any option, call, warrant or right to acquire, or otherwise relating to,
any capital stock or any other security, or (iii) any instrument convertible
into or exchangeable for any capital stock or other security;
(e) there has been no amendment
to the either of the Companies' articles of incorporation or bylaws, and the
Companies have not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) the Companies have not
formed any subsidiary or acquired any equity interest or other interest in any
other Entity;
(g) the Companies have not made
any capital expenditure which exceeds $25,000 in the aggregate;
(h) the Companies have not (i)
entered into or permitted any of the assets owned or used by them to become
bound by any Material Contract (as defined in Section 2.10(a)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
Material Contract to which they are or were party or under which they have or
have had any rights or obligations;
(i) the Companies have not (i)
acquired, leased or licensed any right or other asset from any other Person,
(ii) sold or otherwise disposed of, or leased or licensed, any right or other
asset to any other Person, or
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(iii) waived or relinquished any right, except for immaterial rights or other
immaterial assets acquired, leased, licensed or disposed of in the ordinary
course of business and consistent with the Companies' past practices;
(j) the Companies have not
written off as uncollectible, or established any extraordinary reserve with
respect to, any account receivable or other indebtedness;
(k) the Companies have not made
any pledge of any of their assets or otherwise permitted any of their assets to
become subject to any Encumbrance, except for pledges of immaterial assets made
in the ordinary course of business and consistent with the Companies' past
practices;
(l) the Companies have not (i)
lent money to any Person, or (ii) incurred or guaranteed any indebtedness for
borrowed money;
(m) the Companies have not (i)
established, adopted or amended any Employee Benefit Plan, (ii) paid any bonus
or made any profit-sharing or similar payment to, or increased the amount of
the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of their directors, officers or employees, or
(iii) hired any new employee;
(n) the Companies have not
changed any of their methods of accounting or accounting practices in any
respect;
(o) the Companies have not made
any Tax election;
(p) the Companies have not
commenced or settled any Legal Proceeding;
(q) the Companies have not
entered into any material transaction or taken any other material action
outside the ordinary course of business or inconsistent with their past
practices; and
(r) the Companies have not
agreed or committed to take any of the actions referred to in clauses "(c)"
through "(q)" above.
2.6 TITLE TO ASSETS.
(a) The Companies own, and have
good, valid and marketable title to, all assets purported to be owned by them,
including: (i) all assets reflected on the Unaudited Interim Balance Sheet;
(ii) all assets referred to in Parts 2.7(b), 2.8 and 2.9 of the Disclosure
Schedule and all of the Companies' rights under the Contracts identified in
Part 2.10(a) of the Disclosure Schedule; and (iii) all other assets reflected
in the Companies' books and records as being owned by the Companies. Except as
set forth in Part 2.6(a) of the Disclosure Schedule, all of said assets are
owned by the Companies free and clear of any liens or other Encumbrances,
except for (i) any lien for current taxes not yet due and payable, and (ii)
minor liens that have arisen in the ordinary course of business and that do not
(in any case or in the aggregate) materially detract from the value of the
assets subject thereto or materially impair the operations of the Companies.
(b) Part 2.6(b) of the
Disclosure Schedule identifies all assets that are being leased or licensed to
the Companies.
2.7 BANK ACCOUNTS; RECEIVABLES; CUSTOMERS.
(a) Part 2.7(a) of the
Disclosure Schedule provides accurate and complete information with respect to
each account maintained by or for the benefit of the Companies at any bank or
other financial institution.
(b) Part 2.7(b) of the
Disclosure Schedule provides an accurate and complete breakdown and aging of
all accounts receivable, notes receivable and other receivables of the
Companies as of December 31, 1995.
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Except as set forth in Part 2.7(b) of the Disclosure Schedule, all existing
accounts receivable of the Companies (including those accounts receivable
reflected on the Unaudited Interim Balance Sheet that have not yet been
collected and those accounts receivable that have arisen since December 31,
1995, and have not yet been collected) represent valid obligations of customers
of the Companies arising from bona fide transactions entered into in the
ordinary course of business.
(c) Part 2.7(c) of the
Disclosure Schedule accurately identifies, and provides an accurate and
complete breakdown of the revenues received from, each customer or other Person
for each of the Companies for the year ended December 31, 1995. The Companies
have not received any notice or other communication indicating that any
customer or other Person identified in Part 2.7(c) of the Disclosure Schedule
intends or expects to cease dealing with the Companies or to reduce the volume
of business transacted by such Person with the Companies below historical
levels.
(d) Part 2.7(d) of the
Disclosure Schedule provides an accurate and complete breakdown of all pending
and unfilled orders received by the Companies for products, systems and
services.
2.8 EQUIPMENT; LEASEHOLD.
(a) Part 2.8 of the Disclosure
Schedule provides accurate and complete information with respect to all
material items of equipment, fixtures, leasehold improvements and other
tangible assets owned by or leased to the Companies. The assets identified in
Part 2.8 of the Disclosure Schedule are adequate for the uses to which they are
being put, are in good condition and repair (ordinary wear and tear excepted)
and are adequate for the conduct of the Companies' businesses in the manner in
which such businesses are currently being conducted and in the manner in which
such businesses are proposed to be conducted.
(b) The Companies do not own any
real property or any interest in real property, except for the leasehold(s)
created under the real property lease(s) identified in Part 2.10(a) of the
Disclosure Schedule.
2.9 PROPRIETARY ASSETS.
(a) Part 2.9(a)(1) of the
Disclosure Schedule sets forth, with respect to each Company Proprietary Asset
that has been registered, recorded or filed with any Governmental Body or with
respect to which an application has been filed with any Governmental Body, (i)
a brief description of such Company Proprietary Asset, and (ii) the names of
the jurisdictions covered by the applicable registration, recordation, filing
or application. Part 2.9(a)(2) of the Disclosure Schedule identifies and
provides a brief description of all other Company Proprietary Assets owned by
the Companies. Part 2.9(a)(3) of the Disclosure Schedule identifies and
provides a brief description of each Company Proprietary Asset that is owned by
any other Person and that is licensed to or used by the Companies (except for
any Company Proprietary Asset that is licensed to either Company under any
third party software license generally available to the public at a cost of
less than $500). Except as set forth in Part 2.9(a)(4) of the Disclosure
Schedule, each Company has good, valid and marketable title to all of the
Proprietary Assets identified in Parts 2.9(a)(1) and 2.9(a)(2) of the
Disclosure Schedule, free and clear of all liens and other Encumbrances, and
has a valid right to use all Proprietary Assets identified in Part 2.9(a)(3) of
the Disclosure Schedule. Except as set forth in Part 2.9(a)(5) of the
Disclosure Schedule, the Companies are not obligated to make any payment to any
Person for the use of any Company Proprietary Asset. Except as set forth in Part
2.9(a)(6) of the Disclosure Schedule, the Companies are free to use, modify,
copy, distribute, sell, license or otherwise exploit each of the Company
Proprietary Assets on an exclusive basis.
(b) The Companies have taken all
measures and precautions necessary to protect and maintain the confidentiality
and secrecy of all Company Proprietary Assets (except Company Proprietary
Assets whose value would be unimpaired by public disclosure) and otherwise to
maintain and protect the value of all Company Proprietary Assets. Except as set
forth in Part 2.9(b) of the Disclosure Schedule, the Companies have not
disclosed or delivered or permitted to be disclosed or delivered to any Person,
and no Person (other than the Companies) has access to or has any rights with
respect to, the source code, or any portion or aspect of the source code, of
any Company Proprietary Asset.
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<PAGE> 15
(c) To the knowledge of the
Companies, Parent and the Designated Persons, none of the Companies'
Proprietary Assets infringes or conflicts with any Proprietary Asset owned or
used by any other Person. To the knowledge of the Companies, Parent and the
Designated Persons, the Companies are not infringing, misappropriating or
making any unlawful use of, and the Companies have not at any time infringed,
misappropriated or made any unlawful use of, or received any notice or other
communication of any actual, alleged, possible or potential infringement,
misappropriation or unlawful use of, any Proprietary Asset owned or used by any
other Person. To the best of the knowledge of the Companies, the Parent and the
Designated Persons, no other Person is infringing, misappropriating or making
any unlawful use of, and no Proprietary Asset owned or used by any other Person
infringes or conflicts with, any Company Proprietary Asset.
(d) Except as set forth in Part
2.9(d) of the Disclosure Schedule: (i) each Company Proprietary Asset conforms
in all material respects with any specification, documentation, performance
standard, representation or statement made or provided with respect thereto by
or on behalf of the Companies; and (ii) there has not been any material claim
by any customer or other Person alleging that any Company Proprietary Asset
does not conform in all material respects with any specification,
documentation, performance standard, representation or statement made or
provided by or on behalf of the Companies, and, to the best of the knowledge of
the Companies, the Parent and the Designated Persons, there is no basis for any
such claim. Except as set forth in Part 2.9(d) of the Disclosure Schedule, the
Companies have established adequate reserves on the Unaudited Interim Balance
Sheet to cover all costs associated with any obligations that the Companies may
have with respect to the correction or repair of programming errors or other
defects in the Company Proprietary Assets.
(e) The Company Proprietary
Assets constitute all the Proprietary Assets necessary to enable the Companies
to conduct their business in the manner in which such businesses have been
conducted and in the manner in which such businesses are proposed to be
conducted. Except as set forth in Part 2.9(e) of the Disclosure Schedule, (i)
the Companies have not licensed any of the Company Proprietary Assets to any
Person on an exclusive basis, and (ii) the Companies have not entered into any
covenant not to compete or Contract limiting their ability to exploit fully any
of their Proprietary Assets or to transact business in any market or
geographical area or with any Person.
(f) Except as set forth in Part
2.9(f) of the Disclosure Schedule, all current employees of the Companies have
executed and delivered to the Companies written agreements (containing no
exceptions to or exclusions from the scope of their coverage) that are
substantially identical to the form of the Confidentiality and Non-Disclosure
Agreement attached to the Disclosure Schedule as Appendices 2.9(f)(1). The
Companies have never engaged or received services from any consultant or
independent contractor in connection with the design or development of any
Proprietary Asset. To the knowledge of the Companies, Parent and the Designated
Persons, no former employee of the Company has or claims to have any rights
with respect to, or any ownership interest in, any Company Proprietary Asset.
2.10 CONTRACTS.
(a) Part 2.10(a) of the
Disclosure Schedule identifies each Company Contract that constitutes a
"Material Contract." For purposes of this Agreement, each of the following
shall be deemed to constitute a "Material Contract":
(i) any Contract relating to the employment or
engagement of, or the performance of services by,
any employee, consultant or independent
contractor;
(ii) any Contract relating to the acquisition,
transfer, use, development, sharing or license of
any technology or any Proprietary Asset;
(iii) any Contract imposing any restriction on the
Companies' right or ability (A) to compete with
any other Person, (B) to acquire any product or
other asset or any services from any other
Person, to sell any product or other asset to or
perform any services for any other Person or to
transact business or deal in any other manner
with any other Person, or (C) to develop or
distribute any technology;
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<PAGE> 16
(iv) any Contract creating or involving any agency
relationship, distribution arrangement or
franchise relationship;
(v) any Contract relating to the acquisition,
issuance or transfer of any securities;
(vi) any Contract creating or relating to the creation
of any Encumbrance with respect to any asset
owned or used by the Companies;
(vii) any Contract involving or incorporating any
guaranty, any pledge, any performance or
completion bond, any indemnity, any right of
contribution or any surety arrangement;
(viii) any Contract creating or relating to any
partnership or joint venture or any sharing of
revenues, profits, losses, costs or liabilities;
(ix) any Contract relating to the purchase or sale of
any product or other asset by or to, or the
performance of any services by or for, any
Related Party (as defined in Section 2.19);
(x) any Contract to which any Governmental Body is a
party or under which any Governmental Body has
any rights or obligations, or involving or
directly or indirectly benefiting any
Governmental Body (including any subcontract or
other Contract between the Company and any
contractor or subcontractor to any Governmental
Body);
(xi) any Contract entered into outside the ordinary
course of business or inconsistent with the
Companies' past practices;
(xii) any Contract that has a term of more than 60 days
and that may not be terminated by the Company
(without penalty) within 60 days after the
delivery of a termination notice by the Subject
Business; and
(xiii) any Contract that contemplates or involves (A)
the payment or delivery of cash or other
consideration in an amount or having a value in
excess of $5,000 in the aggregate, or (B) the
performance of services having a value in excess
of $5,000 in the aggregate.
(b) Except as set forth in Part
2.10(b) of the Disclosure Schedule, the Companies have delivered to Fisher
accurate and complete copies of all Contracts identified in Part 2.10(a) of the
Disclosure Schedule, including all amendments thereto. Each Contract identified
in Part 2.10(a) of the Disclosure Schedule is valid and in full force and
effect, and is enforceable by the Companies in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(c) Except as set forth in Part
2.10(c) of the Disclosure Schedule:
(i) The Companies have not violated or breached, or
committed any default under, any Company
Contract, and, to the best of the knowledge of
the Companies, the Parent and the Designated
Persons, no other Person has violated or
breached, or committed any default under, any
Company Contract;
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<PAGE> 17
(ii) to the best of the knowledge of the Companies,
the Parent and the Designated Persons, no event
has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of
time) will, or could reasonably be expected to,
(A) result in a violation or breach of any of the
provisions of any Company Contract, (B) give any
Person the right to declare a default or exercise
any remedy under any Company Contract, (C) give
any Person the right to accelerate the maturity
or performance of any Company Contract, or (D)
give any Person the right to cancel, terminate or
modify any Company Contract;
(iii) since December 31, 1994, the Companies have not
received any notice or other communication
regarding (i) any actual or possible violation or
breach of, or default under, any Company
Contract, or (ii) any actual or possible
termination of any Company Contract; and
(iv) the Companies have not waived any of their
material rights under any Contract.
(d) Except as set forth in Part
2.10(d) of the Disclosure Schedule, no Person is renegotiating, or has the
right to renegotiate, any amount paid or payable to the Companies under any
Company Contract or any other term or provision of any Company Contract.
(e) The Contracts identified in
Part 2.10(a) of the Disclosure Schedule collectively constitute all of the
Material Contracts necessary to enable the Companies to conduct their
businesses in the manner in which their businesses are currently being
conducted and in the manner in which their businesses are proposed to be
conducted.
(f) Part 2.10(f) of the
Disclosure Schedule identifies and provides a brief description of each
proposed Contract as to which any pending bid, offer or proposal has been
submitted or received by the Companies.
2.11 LIABILITIES.
(a) The Companies have no
accrued, contingent or other liabilities of any nature, either matured or
unmatured (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles, and whether due or to
become due), except for: (i) liabilities identified as such in the
"liabilities" column of the Unaudited Interim Balance Sheet; (ii) accounts
payable or accrued salaries that have been incurred by the Companies since
December 31, 1995 in the ordinary course of business and consistent with the
Companies' past practices; and (iii) the liabilities identified in Part 2.11(a)
of the Disclosure Schedule.
(b) Part 2.11(b) of the
Disclosure Schedule provides an accurate and complete breakdown of (i) all
accounts payable of each Company as of February 29, 1996, and (ii) all notes
payable of the Companies and all indebtedness of the Companies for borrowed
money.
(c) Part 2.11(c) of the
Disclosure Schedule provides an accurate and complete breakdown of the
Companies' "deferred support revenue" as of December 31, 1995 and all related
obligations and other liabilities of the Companies.
2.12 COMPLIANCE WITH LEGAL REQUIREMENTS. The Companies
are, and have at all times since December 31, 1994 been, in compliance with all
applicable Legal Requirements, except where the failure to comply with such
Legal Requirements has not had and will not have in any individual case or in
the aggregate, a Material Adverse Effect on the Companies. Except as set forth
in Part 2.12 of the Disclosure Schedule, since December 31, 1994, the Companies
have not received any notice or other communication from any Governmental Body
regarding any actual or possible violation of, or failure to comply with, any
Legal Requirement.
2.13 GOVERNMENTAL AUTHORIZATIONS. Part 2.13 of the
Disclosure Schedule identifies each material Governmental Authorization held by
the Companies, and the Companies have delivered to Fisher accurate and complete
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copies of all Governmental Authorizations identified in Part 2.13 of the
Disclosure Schedule. The Governmental Authorizations identified in Part 2.13 of
the Disclosure Schedule are valid and in full force and effect, and
collectively constitute all Governmental Authorizations necessary to enable the
Companies to conduct their businesses in the manner in which their businesses
are currently being conducted and in the manner in which their businesses are
proposed to be conducted. The Companies are, and at all times since December
31, 1994 have been, in compliance with the material terms and requirements of
the respective Governmental Authorizations identified in Part 2.13 of the
Disclosure Schedule. Since December 31, 1994, the Companies have not received
any notice or other communication from any Governmental Body regarding (a) any
actual or possible violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification
of any Governmental Authorization.
2.14 TAX MATTERS.
(a) Except as set forth on Part
2.14(a) of the Disclosure Schedule, all Tax Returns required to be filed by or
on behalf of the Companies with any Governmental Body with respect to any
transaction occurring or any taxable period ending on or before the Closing
Date (the "Company Returns") (i) have been or will be filed when due, and (ii)
have been, or will be when filed, accurately and completely prepared in
compliance with all applicable Legal Requirements. Except as set forth on Part
2.14(a) of the Disclosure Schedule, all amounts shown on the Company Returns to
be due on or before the Closing Date have been or will be paid on or before the
Closing Date. Except as set forth on Part 2.14(a) of the Disclosure Schedule,
the Companies have delivered to Fisher accurate and complete copies of all
Company Returns for AHS filed since December 31, 1991, and for ASI filed since
June 30, 1992.
(b) The Company Financial
Statements fully accrue all actual and contingent liabilities for Taxes with
respect to all periods through the dates thereof in accordance with generally
accepted accounting principles. The Companies will establish, in the ordinary
course of business and consistent with their past practices, reserves adequate
for the payment of all Taxes for the period from November 30, 1995 through the
Closing Date, and the Companies will disclose the dollar amount of such
reserves to Fisher on or prior to the Closing Date.
(c) Each Company Return relating
to income Taxes that has been filed with respect to any period ended on or
prior to December 31, 1991 with respect to AHS, and June 30, 1992 with respect
to ASI, has either (i) been examined and audited by all relevant Governmental
Bodies, or (ii) by virtue of the expiration of the limitation period under
applicable Legal Requirements, is no longer subject to examination or audit by
any Governmental Body. Except as set forth in Part 2.14(c) of the Disclosure
Schedule, there has been no examination or audit of any Company Return, and no
such examination or audit has been proposed or scheduled by any Governmental
Body. The Companies have delivered to Fisher accurate and complete copies of
all audit reports and similar documents (to which the Companies have access)
relating to the Company Returns. Except as set forth in Part 2.14(c) of the
Disclosure Schedule, no extension or waiver of the limitation period applicable
to any of the Company Returns has been granted (by the Companies or any other
Person), and no such extension or waiver has been requested from the Companies.
(d) Except as set forth in Part
2.14(d) of the Disclosure Schedule, no claim or Legal Proceeding is pending or
has been threatened against or with respect to the Companies in respect of any
Tax. Except as set forth in Part 2.14(d) of the Disclosure Schedule, there are
no unsatisfied liabilities for Taxes (including liabilities for interest,
additions to tax and penalties thereon and related expenses) with respect to
any notice of deficiency or similar document received by the Companies. There
are no liens for Taxes upon any of the assets of the Companies, except liens
for current Taxes not yet due and payable. The Companies have not entered into
or become bound by any agreement or consent pursuant to Section 341(f) of the
Code. The Companies have not been, and the Companies will not be, required to
include any adjustment in taxable income for any tax period (or portion
thereof) pursuant to Section 481 of 263A of the Code or any comparable
provision under state or foreign Tax laws as a result of transactions or events
occurring, or accounting methods employed, prior to the Closing.
(e) There is no agreement, plan,
arrangement or other Contract covering any employee or independent contractor
or former employee or independent contractor of the Companies that, considered
individually or considered collectively with any other such Contracts, will, or
could reasonably be expected to, give rise directly or
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<PAGE> 19
indirectly to the payment of any amount that would not be deductible pursuant to
Section 280G or Section 162 of the Code. The Companies are not, and have never
been, a part to or bound by any tax indemnity agreement, tax sharing agreement,
tax allocation agreement or similar Contract.
2.15 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(a) Part 2.15(a) of the
Disclosure Schedule contains a list of all salaried employees of the Companies
as of the date of this Agreement, and correctly reflects their salaries, any
other compensation payable to them (including compensation payable pursuant to
bonus, deferred compensation or commission arrangements), their dates of
employment and their positions. The Companies are not a party to any collective
bargaining contract or other Contract with a labor union involving any of its
employees.
(b) Part 2.15(b) of the
Disclosure Schedule identifies each employee of the Companies who is not fully
available to perform work because of disability or other leave, and sets forth
the basis of such leave and the anticipated date of return to full service.
(c) Part 2.15(c) of the
Disclosure Schedule identifies each salary, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance pay,
termination pay, hospitalization, medical, insurance, supplemental unemployment
benefits, profit-sharing, pension or retirement plan, program or agreement
(individually referred to as a "Plan" and collectively referred to as the
"Plans") sponsored, maintained, contributed to or required to be contributed to
by the Companies for the benefit of any current or former employee of the
Companies.
(d) The Companies do not
maintain, sponsor or contribute to, and, to the best of the knowledge of the
Companies, the Parent and the Designated Persons, the Companies have not at any
time in the past maintained, sponsored or contributed to, any employee pension
benefit plan (as defined in Section 3(2)) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not excluded from
coverage under specific Titles or Merger Subtitles of ERISA) for the benefit of
employees or former employees of the Companies (a "Pension Plan").
(e) The Companies do not
maintain, sponsor or contribute to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA, whether or not excluded from coverage under
specific Titles or Merger Subtitles of ERISA) for the benefit of employees or
former employees of the Companies (a "Welfare Plan") except for those Welfare
Plans described in Part 2.15(e) of the Disclosure Schedule, none of which is a
multiemployer plan (within the meaning of Section 3(37) of ERISA).
(f) With respect to each Plan,
the Companies have delivered to Fisher:
(i) an accurate and complete copy of such Plan
(including all amendments thereto);
(ii) an accurate and complete copy of the annual
report (if required under ERISA) with respect to
such Plan for each of 1993 and 1994;
(iii) an accurate and complete copy of (A) the most
recent summary plan description, together with
each Summary of Material Modifications (if
required under ERISA) with respect to such Plan,
and (B) each material employee communication
relating to such Plan;
(iv) if such Plan is funded through a trust or any
third party funding vehicle, an accurate and
complete copy of the trust or other funding
agreement (including all amendments thereto) and
accurate and complete copies of the most recent
financial statements thereof;
(v) accurate and complete copies of all Contracts
relating to such Plan, including service provider
agreements, insurance contracts, minimum premium
contracts,
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stop-loss agreements, investment management
agreements, subscription and participation
agreements and recordkeeping agreements; and
(vi) an accurate and complete copy of the most recent
determination letter received from the Internal
Revenue Service with respect to such Plan (if
such Plan is intended to be qualified under
Section 401(a) of the Code).
(g) The Companies are not
required to be, and, to the best of the knowledge of the Companies, the Parent
and the Designated Persons, the Companies have never been required to be,
treated as a single employer with any other Person under Section 4001(b)(1) of
ERISA or Section 414(b), (c), (m) or (o) of the Code. The Companies have never
been a member of an "affiliated service group" within the meaning of Section
414(m) of the Code. To the best of the knowledge of the Companies, the Parent
and the Designated Persons, the Companies have never made a complete or partial
withdrawal from a "multiemployer plan" (as defined in Section 3(37) of ERISA)
resulting in "withdrawal liability" (as defined in Section 4201 of ERISA),
without regard to subsequent reduction or waiver of such liability under either
Section 4207 or 4208 of ERISA.
(h) The Companies do not have
any plan or commitment to create any additional Welfare Plan or any Pension
Plan, or to modify or change any existing Welfare Plan or Pension Plan (other
than to comply with applicable law).
(i) No Welfare Plan provides
death, medical or health benefits (whether or not insured) with respect to any
current or former employee of the Companies after any such employee's
termination of service (other than (i) benefit coverage mandated by applicable
law, including coverage provided pursuant to Section 4980B of the Code, (ii)
deferred compensation benefits accrued as liabilities on the Unaudited Interim
Balance Sheet, and (iii) benefits the full cost of which are borne by current
or former employees of the Companies (or their beneficiaries).
(j) With respect to each of the
Welfare Plans constituting a group health plan within the meaning of Section
4980B(g)(2) of the Code, the provisions of Section 4980B of the Code ("COBRA")
have been complied with in all material respects.
(k) Each of the Plans has been
operated and administered in all material respects in accordance with
applicable Legal Requirements, including ERISA and the Code.
(l) Each of the Plans intended
to be qualified under Section 401(a) of the Code has received a favorable
determination from the Internal Revenue Service, and neither the Parent, the
Companies, nor any of the Designated Person is aware of any reason why any such
determination letter should be revoked.
(m) Except as set forth in
Part 2.15(m) of the Disclosure Schedule, neither the execution, delivery or
performance of this Agreement, nor the consummation of the Mergers or any of the
other transactions contemplated by this Agreement, will result in any bonus
payment, golden parachute payment, severance payment or other payment to any
current or former employee or director of the Companies (whether or not under
any Plan), or materially increase the benefits payable under any Plan, or result
in any acceleration of the time of payment or vesting of any such benefits.
(n) The Companies are in
compliance in all material respects with all applicable Legal Requirements and
Contracts relating to employment, employment practices, employee compensation,
wages, bonuses and terms and conditions of employment.
(o) The Companies have good
labor relations, and neither the Companies, the Parent nor any of the
Designated Persons has any knowledge of any facts indicating that (i) the
consummation of the Mergers or any of the other transactions contemplated by
this Agreement will have a material adverse effect on the Companies' labor
relations, or (ii) any of the Companies' employees intends to terminate his or
her employment with the Companies.
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2.16 ENVIRONMENTAL MATTERS. The Companies are and have at
all times been in compliance, in all material respects, with all applicable
Environmental Laws. The Companies possess all permits and other Governmental
Authorizations required under applicable Environmental Laws, and the Companies
are and have at all times been in compliance with the terms and requirements of
all such Governmental Authorizations. The Companies have not received any
notice or other communication (whether from a Governmental Body, citizens
group, employee or otherwise) that alleges that the Companies are not in
compliance with any Environmental Law, and, to the best of the knowledge of the
Companies, the Parent and Designated Persons, there are no circumstances that
could reasonably be expected to prevent or interfere with the Companies'
compliance with any Environmental Law in the future. To the best of the
knowledge of the Companies, the Parent and the Designated Persons, no current
or prior owner of any property leased or controlled by the Companies has
received any notice or other communication (whether from a Governmental Body,
citizens group, employee or otherwise) that alleges that such current or prior
owner or the Companies are not or were not in compliance with any Environmental
Law. All Governmental Authorizations currently held by the Companies pursuant
to Environmental Laws are identified in Part 2.16 of the Disclosure Schedule.
2.17 SALE OF PRODUCTS; PERFORMANCE OF SERVICES.
(a) Except in the ordinary
course of business in accordance with past practices, the Companies will not
incur or otherwise become subject to any material liability arising from (i)
any product, system, program, Proprietary Asset or other asset designed,
developed, manufactured, assembled, sold, supplied, installed, repaired,
licensed or made available by the Companies on or prior to the Closing Date, or
(ii) any consulting services, installation services, programming services,
repair services, maintenance services, training services, support services or
other services performed by the Companies on or prior to the Closing Date.
(b) Except as set forth in Part
2.17(b) of the Disclosure Schedule, no customer or other Person has, at any
time since December 31, 1994, asserted or threatened to assert any claim
against the Companies (other than claims that have been resolved satisfactorily
at no material cost to the Companies) under or based upon (i) any warranty
provided by or on behalf of the Companies, or (ii) any services performed by
the Companies.
2.18 INSURANCE. Part 2.18 of the Disclosure Schedule
provides accurate and complete information with respect to each insurance
policy maintained by, at the expense of or for the benefit of each of the
Companies and with respect to any claims made thereunder. The Companies have
delivered to Fisher accurate and complete copies of the insurance policies
identified in Part 2.18 of the Disclosure Schedule. Each of the insurance
policies identified in Part 2.18 of the Disclosure Schedule is in full force
and effect. Since December 31, 1994, the Companies have not received any notice
or other communication regarding any actual or possible (a) cancellation or
invalidation of any insurance policy, (b) refusal of any coverage or rejection
of any claim under any insurance policy, or (c) material adjustment in the
amount of the premiums payable with respect to any insurance policy.
2.19 RELATED PARTY TRANSACTIONS. Except as set forth in
Part 2.19 of the Disclosure Schedule: (a) no Related Party has, and no Related
Party has at any time since December 31, 1994 had, any direct or indirect
interest in any material asset used in or otherwise relating to the business of
the Companies; (b) no Related Party is, or has at any time since December 31,
1994 been, indebted to the Companies; (c) since December 31, 1994, no Related
Party has entered into, or has had any direct or indirect financial interest
in, any material Contract, transaction or business dealing involving the
Companies; (d) no Related Party is competing, or has at any time since December
31, 1994 competed, directly or indirectly, with the Companies; and (e) no
Related Party has any claim or right against the Companies (other than rights
to receive compensation for services performed as an employee of the
Companies). (For purposes of this Section 2.19, each of the following shall be
deemed to be a "Related Party": (i) each of the Designated Persons; (ii) each
individual who is, or who has at any time since December 31, 1992 been, an
officer or director of the Companies; (iii) each individual who is, or who at
any time since December 31, 1992 has been, a member of the immediate family of
any of the individuals referred to in clauses "(i)" and "(ii)" above; and (iv)
any trust or other Entity (other than the Companies) in which any one of the
individuals referred to in clauses "(i)," "(ii)" and "(iii)" above holds (or in
which more than one of such individuals collectively hold), beneficially or
otherwise, a material voting, proprietary or equity interest.)
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2.20 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Part
2.20(a) of the Disclosure Schedule, there is no pending Legal Proceeding, and,
to the best of the knowledge of the Companies, the Parent and the Designated
Persons, no Person has threatened to commence any Legal Proceeding: (i) that
involves the Companies or any of the assets owned or used by the Companies; or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, the Mergers or any of the other
transactions contemplated by this Agreement. To the best of the knowledge of
the Companies, the Parent and the Designated Persons, except as set forth in
Part 2.20(a) of the Disclosure Schedule, no event has occurred, and no claim,
dispute or other condition or circumstance exists, that will, or that could
reasonably be expected to, give rise to or serve as a basis for the
commencement of any such Legal Proceeding.
(b) Except as set forth in Part
2.20(b) of the Disclosure Schedule, no Legal Proceeding is currently pending
against the Companies.
(c) There is no order, writ,
injunction, judgment or decree to which the Companies, or any of the assets
owned or used by the Companies, are subject. Neither the Designated Persons,
the Parent nor the Companies are is subject to any order, writ, injunction,
judgment or decree that relates to the Companies' business or to any of the
assets owned or used by the Companies. To the best of the knowledge of the
Companies, the Parent and the Designated Persons, no officer or other employee
of the Companies is subject to any order, writ, injunction, judgment or decree
that prohibits such officer or other employee from engaging in or continuing
any conduct, activity or practice relating to the Companies' businesses.
2.21 AUTHORITY; BINDING NATURE OF AGREEMENT. The Parent,
the Designated Persons and the Companies have the absolute and unrestricted
right, power and authority to enter into and to perform their respective
obligations under this Agreement; and the execution, delivery and performance
by Parent and the Companies of this Agreement have been duly authorized by all
necessary action on the part of the Parent, the Companies and their respective
boards of directors and shareholders. This Agreement constitutes the legal,
valid and binding obligation of the Designated Persons, the Parent and the
Companies, enforceable against the Designated Persons, the Parent and the
Companies in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
2.22 NON-CONTRAVENTION; CONSENTS. Except as set forth in
Part 2.22 of the Disclosure Schedule, neither (i) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in
this Agreement, nor (ii) the consummation of the Mergers or any of the other
transactions contemplated by this Agreement, will directly or indirectly (with
or without notice or lapse of time):
(a) contravene, conflict with or
result in a violation of (i) any of the provisions of the Parent's or the
Companies' articles of incorporation or bylaws, or (ii) any resolution adopted
by the Parent's or the Companies' shareholders, the Parent's or the Companies'
boards of directors or any committee of the Parent's or the Companies' boards
of directors;
(b) contravene, conflict with or
result in a violation of, or give any Governmental Body or other Person the
right to challenge any of the transactions contemplated by this Agreement or to
exercise any remedy or obtain any relief under, any Legal Requirement or any
order, writ, injunction, judgment or decree to which the Parent or the
Companies, or any of the assets owned or used by the Parent or the Companies,
are subject;
(c) contravene, conflict with or
result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or
modify, any Governmental Authorization that is held by the Companies or that
otherwise relates to the Companies' business or to any of the assets owned or
used by the Companies;
(d) contravene, conflict with or
result in a violation or breach of, or result in a default under, any provision
of any Material Contract, or give any Person the right to (i) declare a default
or exercise any remedy under any
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<PAGE> 23
Material Contract, (ii) accelerate the maturity or performance of any Material
Contract, or (iii) cancel, terminate or modify any Material Contract; or
(e) result in the imposition or
creation of any lien or other Encumbrance upon or with respect to any asset
owned or used by the Companies (except for minor liens that will not, in any
case or in the aggregate, materially detract from the value of the assets
subject thereto or materially impair the operations of the Companies).
Except as set forth in Part 2.22 of the Disclosure Schedule, the Parent and the
Companies are not and will not be required to make any filing with or given any
notice to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of the
Mergers or any of the other transactions contemplated by this Agreement.
2.23 FULL DISCLOSURE. This Agreement (including the
Disclosure Schedule) does not, and the Parent's and Designated Persons' Closing
Certificate (as defined in Section 7.4(h)) will not, (i) contain any
representation, warranty or information that is false or misleading with
respect to any material fact, or (ii) omit to state any material fact necessary
in order to make the representations, warranties and information contained and
to be contained herein and therein not false or misleading.
Section 3. REPRESENTATIONS AND WARRANTIES OF FISHER
Fisher represents and warrants to the Companies, the
Parent and the Designated Persons as follows:
3.1 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Fisher will deliver to the
Companies, within five (5) days hereof, accurate and complete copies (excluding
copies of exhibits) of each report, registration statement, (on a form other
than Form S-8) and definitive proxy statement filed by Fisher with the SEC
between January 1, 1992 and the date of this Agreement (the "Fisher SEC
Documents"). As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing): (i) each of the Fisher SEC Documents complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the Fisher SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The consolidated
financial statements contained in the Fisher SEC Documents: (i) complied as to
form in all material respects with the published rules and regulations of the
SEC applicable thereof; (ii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered, except as may be indicated in the notes to such financial statements
and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC,
and except that unaudited financial statements may not contain footnotes and are
subject to normal and recurring year-end audit adjustments (which will not,
individually or in the aggregate, be material in magnitude); and (iii) fairly
present the consolidated financial position of Fisher as of the respective dates
thereof and the consolidated results of operations of Fisher for the periods
covered thereby.
3.2 AUTHORITY; BINDING NATURE OF AGREEMENT. Subject to
obtaining the requisite approval of Fisher's shareholders with respect to the
amendment to Fisher's Articles of Incorporation described in Section
1.4(c)(iii) hereof, Fisher has the absolute and unrestricted right, power and
authority to perform its obligations under this Agreement; and the execution,
delivery and performance by Fisher of this Agreement have been duly authorized
by all necessary action on the part of Fisher and its board of directors. This
Agreement shall constitute the legal, valid and binding obligation of Fisher,
enforceable against it in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive
relief and other equitable remedies.
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<PAGE> 24
3.3 VALID ISSUANCE. The Fisher Common Stock to be issued
in the Mergers will, when issued in accordance with the provisions of this
Agreement, be validly issued, fully paid and nonassessable.
3.4 MERGER SUBS. The Merger Subs shall, prior to
Closing, have been duly organized, validly existing and in good standing under
the laws of Georgia. Fisher shall be the sole shareholder of the Merger Subs.
Prior to the Closing, the Mergers shall have been authorized by all necessary
action of the part of Merger Subs, their respective boards of directors and
Fisher as sole shareholder.
Section 4. CERTAIN COVENANTS OF THE COMPANIES, THE
PARENT AND THE DESIGNATED PERSONS
4.1 ACCESS AND INVESTIGATION. During the period from the
date of this Agreement through the Effective Time (the "Pre-Closing Period"),
the Parent and the Companies shall, and shall cause their Representatives to:
(a) provide Fisher and Fisher's Representatives with reasonable access to the
Companies' Representatives, personnel and assets and to all existing books,
records, Tax Returns, work papers and other documents and information relating
to the Companies; and (b) provide Fisher and Fisher's Representatives with such
copies of the existing books, records, Tax Returns, work papers and other
documents and information relating to the Companies, and with such additional
financial, operating and other data and information regarding the Companies, as
Fisher may reasonably request. Notwithstanding the provisions of Section 12.17,
paragraph 7 of the letter agreement between Parent and Fisher dated November
16, 1995 ("Letter of Intent") shall remain in effect through the Closing Date
and shall bind Fisher with respect to any Evaluation Material (as defined in
the Letter of Intent) provided to Fisher or its Representatives during the Pre-
Closing Period.
4.2 OPERATION OF THE COMPANIES' BUSINESSES. During the
Pre-Closing Period, unless Fisher otherwise consents in writing:
(a) the Companies shall conduct
their businesses and operations in the ordinary course and in substantially the
same manner as such business and operations have been conducted prior to the
date of this Agreement;
(b) the Companies shall use
reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and
maintain their relations and goodwill with all suppliers, customers, landlords,
creditors, employees and other Persons having business relationships with the
Companies;
(c) the Companies shall
keep in full force all insurance policies identified in Part 2.18 of he
Disclosure Schedule;
(d) the Companies shall cause
their officers to report regularly to Fisher concerning the status of the
Companies' businesses;
(e) the Companies shall not
declare, accrue, set aside or pay any dividend or make any other distribution
in respect of any shares of capital stock, and shall not repurchase, redeem or
otherwise reacquire any shares of capital stock or other securities;
(f) the Companies shall not
sell, issue or authorize the issuance of (i) any capital stock or other
security, (ii) any option, call, warrant or right to acquire, or relating to,
any capital stock or other security, or (iii) any instrument convertible into
or exchangeable for any capital stock or other security;
(g) neither the Companies, the
Parent nor any of the Designated Persons shall amend or permit the adoption of
any amendment to the Companies' articles of incorporation or bylaws, or effect
or permit either of the Companies to become a party to any Acquisition
Transaction, recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction;
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<PAGE> 25
(h) the Companies shall not form
any subsidiary or acquire any equity interest or other interest in any other
Entity;
(i) the Companies shall not make
any capital expenditure, except for capital expenditures that, when added to
all other capital expenditures made on behalf of the Companies during the Pre-
Closing Period, do not exceed $30,000 in the aggregate;
(j) the Companies shall not (i)
enter into or become bound by, or permit any of the assets owned or used by
them to become bound by, any Material Contract, or (ii) amend or prematurely
terminate, or waive any material right or remedy under, any Material Contract;
(k) the Companies shall not,
other than in the ordinary course of business consistent with past practice (i)
acquire, lease or license any right or other asset from any other Person, (ii)
sell or otherwise dispose of, or lease or license, any right or other asset to
any other Person, or (iii) waive or relinquish any right, except for immaterial
assets acquired, leased, licensed or disposed of by the Companies pursuant to
Contracts that are not Material Contracts;
(l) the Companies shall not (i)
lend money to any Person, or (ii) incur or guarantee any indebtedness, except
that the Companies may make routine borrowings in the ordinary course of
business under their respective existing lines of credit;
(m) The Companies shall not (i)
establish, adopt or amend any Employee Benefit Plan (other than the employee
retention program and severance program referred to in Section 6.9), (ii) pay
any bonus or make any profit-sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe benefits or other compensation
or remuneration payable to, any of its directors, officers or employees, or
(iii) hire any new employee whose aggregate annual compensation is expected to
exceed $35,000;
(n) the Companies shall not
change any of their methods of accounting or accounting practices in any
respect, including without limitation any change with respect to writing off of
accounts receivable;
(o) the Companies shall not make
any Tax election;
(p) the Companies shall not
commence or settle any Legal Proceeding;
(q) the Companies shall not
enter into any material transaction or take any other material action outside
the ordinary course of business or inconsistent with its past practices; and
(r) the Companies shall not
agree or commit to take any of the actions described in clauses "(e)" through
"(q)" of this Section 4.2.
4.3 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.
(a) During the Pre-Closing
Period, the Companies, the Parent and the Designated Persons shall promptly
notify Fisher in writing of:
(i) the discovery by the Companies, the Parent or the
Designated Persons of any event, condition, fact
or circumstance that occurred or existed on or
prior to the date of this Agreement and that
caused or constitutes an inaccuracy in or breach
of any representation or warranty made by the
Companies, the Parent or any of the Designated
Persons in this Agreement;
(ii) any event, condition, fact or circumstance that
occurs, arises or exists after the date of this
Agreement and that would cause or constitute an
inaccuracy in or breach of any representation or
warranty made by the Companies, the Parent or any
of the
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<PAGE> 26
Designated Persons in this Agreement if (A) such
representation or warranty had been made as of
the time of the occurrence, existence or
discovery of such event, condition, fact or
circumstance, or (B) such event, condition, fact
or circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(iii) any breach of any covenant or obligation of the
Companies, the Parent or any of the Designated
Persons; and
(iv) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the
conditions set forth in Section 7 or Section 8
impossible or unlikely.
(b) Within 10 days following the
restatement date of this Agreement, the Companies shall deliver a final amended
and restated Disclosure Schedule (subject to updates as provided below). To the
extent such amended and restated Disclosure Schedule contains information not
previously reflected on the original Disclosure Schedule or updates thereof
subsequently delivered to Fisher, Fisher shall have the option to terminate
this Agreement by giving notice within 7 days as described in this paragraph.
If any event, condition, fact or circumstance that is required to be disclosed
pursuant to Section 4.3(a) requires any change in the Disclosure Schedule, or
if any such event, condition, fact or circumstance would require such a change
assuming the Disclosure Schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact or circumstance, then the
Companies, the Parent or the Designated Persons shall promptly deliver to
Fisher an update to the Disclosure Schedule specifying such change. Upon
receipt of any such updated Disclosure Schedule from the Companies, the Parent
or the Designated Persons, Fisher shall have the right to terminate this
Agreement in accordance with Section 9.1(h) by giving notice in accordance with
Section 9.2 within 7 days following delivery of such updated Disclosure
Schedule to Fisher. If Fisher fails to give such notice within such 7 day
period, the Disclosure Schedule shall be deemed amended to include the updated
information for all purposes hereunder.
4.4 NO NEGOTIATION. During the Pre-Closing Period,
neither the Companies, the Parent nor any of the Designated Persons shall,
directly or indirectly:
(a) solicit or encourage the
initiation of any inquiry, proposal or offer from any Person (other than
Fisher) relating to a possible Acquisition Transaction;
(b) participate in any
discussions or negotiations or enter into any agreement with, or provide any
non-public information to, any Person (other than Fisher) relating to or in
connection with a possible Acquisition Transaction; or
(c) consider, entertain or
accept any proposal or offer from any Person (other than Fisher) relating to a
possible Acquisition Transaction.
The Parent or the Companies shall promptly notify Fisher in writing of any
inquiry, proposal or offer relating to a possible Acquisition Transaction that
is received by the Parent or the Companies or any of the Designated Persons
during the Pre-Closing Period.
4.5 DUE DILIGENCE INVESTIGATION. Within 10 days following
the restatement date of this Agreement, the Parent shall complete its due
diligence investigation of Fisher. If such investigation reveals any fact that
Parent determines in its sole discretion will affect the business, assets or
operations of Fisher in a material adverse manner, then Parent may, within 20
days following the restatement date of this Agreement, terminate this Agreement
pursuant to Section 9.1(i). Parent's due diligence investigation of Fisher
shall not in any case diminish, obviate or otherwise affect the representations
or warranties contained in Section 3. Parent's failure to terminate this
Agreement as provided above in this Section shall not affect in any way, or be
deemed a waiver of, Parent's rights under Sections 8 or 10 of this Agreement.
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<PAGE> 27
Section 5. CERTAIN COVENANTS OF FISHER
5.1 ACCESS AND INVESTIGATION. During the Pre-Closing
Period, Fisher shall, and shall cause its Representatives to: (a) provide the
Parent and the Parent's Representatives with reasonable access to Fisher's
Representatives, personnel and assets and to all existing books, records, Tax
Returns, work papers and other documents and information relating to Fisher or
the Merger Subs; and (b) provide the Parent and the Parent's Representatives
with such copies of the existing books, records, Tax Returns, work papers and
other documents and information relating to Fisher or the Merger Subs, and with
such additional financial, operating and other data and information regarding
Fisher or the Merger Subs, as the Parent may reasonably request.
Notwithstanding the provisions of Section 12.17, paragraph 7 of the Letter of
Intent shall remain in effect through the Closing Date and shall bind the
Parent, the Companies, and the Designated Persons with respect to any
Evaluation Material (as defined in the Letter of Intent) provided to the
Parent, the Companies or the Designated Persons or their respective
Representatives at any time during the Pre-Closing Period.
5.2 OPERATION OF FISHER'S BUSINESS. During the
Pre-Closing Period, unless the Parent otherwise consents in writing:
(a) Fisher shall conduct its
business and operations in the ordinary course and in substantially the same
manner as such business and operations have been conducted prior to the date of
this Agreement;
(b) Fisher shall use reasonable
efforts to preserve intact its current business organization, keep available
the services of its current officers and employees and maintain its relations
and goodwill with all suppliers, customers, landlords, creditors, employees and
other Persons having business relationship with Fisher;
(c) Fisher shall keep in full
force all its insurance policies;
(d) Fisher shall cause its
officers to report regularly to Parent concerning the status of Fisher's
business;
(e) Fisher shall not declare,
accrue, set aside or pay any dividend or make any other distribution in respect
of any shares of capital stock, and shall not repurchase, redeem or otherwise
reacquire any shares of capital stock or other securities;
(f) Except as permitted or
contemplated herein, Fisher shall not sell, issue or authorize the issuance of
(i) any capital stock or other security, (ii) any option, call, warrant or
right to acquire, or relating to, any capital stock or other security, or (iii)
any instrument convertible into or exchangeable for any capital stock or other
security; provided, however, that Fisher may arrange for the private placement
of up to $1.2 million in debt that is convertible into common stock of Fisher
(on the basis of $1 in debt being convertible to one share of common stock of
Fisher) so long as Parent is afforded the opportunity to participate in any
such private placement if it so elects and so long as no more than 1,200,000
shares of Fisher common stock are issued upon any such conversion (unless
Parent shall consent otherwise);
(g) Except as permitted or
contemplated herein, Fisher shall not amend or permit the adoption of any
amendment to Fisher's articles of incorporation or bylaws, or become a party to
any Acquisition Transaction, recapitalization, reclassification of shares,
stock split, reverse stock split or similar transaction;
(h) Fisher shall not form any
subsidiary or acquire any equity interest or other interest in any other Entity
other than the Merger Subs;
(i) Fisher shall not make any
capital expenditure, except for capital expenditures that, when added to all
other capital expenditures made on behalf of Fisher during the Pre-Closing
Period, do not exceed $30,000 in the aggregate;
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<PAGE> 28
(j) Fisher shall not (i) enter
into or become bound by, or permit any of the assets owned or used by it to
become bound by, any Material Contract, or (ii) amend or prematurely terminate,
or waive any material right or remedy under, any Material Contract;
(k) Fisher shall not, other than
in the ordinary course of business consistent with past practice, (i) acquire,
lease or license any right or other asset from any other Person, (ii) sell or
otherwise dispose of, or lease or license, any right or other asset to any
other Person or (iii) waive or relinquish any right, except for immaterial
assets acquired, leased, licensed or disposed of by Fisher pursuant to
Contracts that are not Material Contracts;
(l) Fisher shall not (i) lend
money to any Person, or (ii) incur or guarantee any indebtedness, except that
Fisher may make routine borrowings in the ordinary course of business, under
its existing lines of credit;
(m) Fisher shall not (i)
establish, adopt or amend any Employee Benefit Plan, (ii) pay any bonus or make
any profit-sharing or similar payment to, or increase the amount of the wages,
salary, commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees, or (iii) hire any new
employee whose aggregate annual compensation is expected to exceed $35,000;
(n) Fisher shall not change any
of its methods of accounting or accounting practices in any respect;
(o) Fisher shall not make any
Tax election;
(p) Fisher shall not commence or
settle any Legal Proceeding;
(q) Fisher shall not enter into
any material transaction or take any other material action outside the ordinary
course of business or inconsistent with its past practices; and
(r) Fisher shall not agree or
commit to take any of the actions described in clauses "(e)" through "(q)" of
this Section 5.2.
5.3 NOTIFICATION.
(a) During the Pre-Closing
Period, Fisher shall promptly notify the Parent in writing of:
(i) the discovery by Fisher of any event, condition,
fact or circumstance that occurred or existed on
or prior to the date of this Agreement and that
caused or constitutes an inaccuracy in or breach
of any representation or warranty made by Fisher
in this Agreement;
(ii) any event, condition, fact or circumstance that
occurs, arises or exists after the date of this
Agreement and that would cause or constitute an
inaccuracy in or breach of any representation or
warranty made by Fisher in this Agreement if (A)
such representation or warranty had been made as
of the time of the occurrence, existence or
discovery of such event, condition, fact or
circumstance, or (B) such event, condition, fact
or circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(iii) any breach of any covenant or obligation of
Fisher; and
(iv) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the
conditions set forth in Section 7 or Section 8
impossible or unlikely.
5.4 NO NEGOTIATION. During the Pre-Closing Period Fisher
shall not, directly or indirectly:
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(a) solicit or encourage the
initiation of any inquiry, proposal or offer from any Person (other than
Parent) relating to a possible Acquisition Transaction;
(b) participate in any
discussions or negotiations or enter into any agreement with, or provide any
non-public information to, any Person (other than Parent) relating to or in
connection with a possible Acquisition Transaction; or
(c) consider, entertain or
accept any proposal or offer from any Person (other than Parent) relating to a
possible Acquisition Transaction;
provided, however, that Fisher may take any of the actions referred to in (a)
through (c) above to the extent Fisher's Board of Directors in good faith
determines that such action is required in order to discharge the Board of
Directors' fiduciary obligations under the Code, and, if Fisher's Board of
Directors determines in good faith in the exercise its fiduciary duty that any
such possible Acquisition Transaction would be of greater benefit to Fisher's
shareholders than the Mergers, Fisher may terminate this Agreement in
accordance with Section 9.1(i). In the event of such a termination, Fisher
agrees to reimburse the Companies for their Merger Fees (as defined in Section
12.3). In addition, if the Acquisition Transaction accepted by Fisher's Board
of Directors in lieu of the Mergers are consummated, and the value of
consideration received by Fisher's shareholders as a result of such Acquisition
Transaction exceeds $3,000,000, at the closing of such Acquisition Transaction,
Fisher shall pay the Companies 25% of the amount by which such consideration
exceeds $3,000,000. Fisher shall have the option of making such payment in cash
or in the same form of consideration paid to Fisher shareholders as a result of
such Acquisition Transaction.
Fisher shall promptly notify the Parent in writing of any inquiry, proposal or
offer relating to a possible Acquisition Transaction that is received by Fisher
during the Pre-Closing Period.
5.5 DUE DILIGENCE INVESTIGATION. Within 10 days following
the restatement date of this Agreement, Fisher shall complete its due diligence
investigation of the Companies. If such investigation reveals facts which lead
Fisher reasonably and in good faith to believe: (i) that the Companies
intentionally withheld or concealed material information requested by Fisher in
connection with such due diligence investigation; (ii) that the representations
and warranties contained in Section 2 are inaccurate in any material respect; or
(iii) that there has been a material adverse change in the Companies' business,
assets, liabilities, operations, financial performance or prospects since
December 31, 1995, then Fisher may, within 20 days following the date of this
Agreement, terminate this Agreement pursuant to Section 9.1(k). Fisher's due
diligence investigation of Parent shall not in any case diminish, obviate or
otherwise affect the representations or warranties contained in Section 2.
Fisher's failure to terminate this Agreement as provided above in this Section
shall not affect in any way or be deemed a waiver of Fisher's rights under
Sections 7 or 10 of this Agreement.
Fisher shall promptly notify the Parent in writing of any inquiry, proposal or
offer relating to a possible Acquisition Transaction that is received by Fisher
during the Pre-Closing Period.
Section 6. ADDITIONAL COVENANTS OF THE PARTIES
6.1 FILINGS AND CONSENTS. As promptly as practicable
after the execution of this Agreement, each party to this Agreement (a) shall
make all filings (if any) and give all notices (if any) required to be made and
given by such party in connection with the Mergers and the other transactions
contemplated by this Agreement, and (b) shall use his, its or their best
efforts to obtain each Consent (if any) required to be obtained (pursuant to
any applicable Legal Requirement or Contract, or otherwise) by such party in
connection with the Mergers or any of the other transactions contemplated by
this Agreement. The Parent and the Companies shall promptly deliver to Fisher a
copy of each such filing made, each such notice given and each such Consent
obtained by the Companies during the Pre-Closing Period. Fisher shall promptly
deliver to the Parent a copy of each such filing made, each such notice given
and each such consent obtained by Fisher during the Pre-Closing Period.
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6.2 PROXY STATEMENT; OTHER FILINGS.
(a) Fisher and the Companies
shall prepare, shall file with the SEC as promptly as practicable and shall use
all reasonable efforts to have cleared by the SEC, a proxy statement with
respect to the Shareholders' Meeting referred to in Section 6.3, the changes in
the articles of incorporation and Bylaws contemplated in Section 1.4 hereof,
the transfer of Fisher assets and liabilities to the respective Merger Subs as
contemplated in Section 1.1 hereof and the payment of the Merger Consideration
described in Section 1.5. The term "Proxy Statement" shall mean such proxy
statement at the time it initially is mailed to Fisher's shareholders and all
amendments or supplements thereto duly filed and similarly mailed. Each of
Fisher and the Companies agrees to correct promptly (but in no event later than
the date of the Shareholders' Meeting referred to in Section 6.3) any
information provided by it for use in the Proxy Statement which contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Fisher, Parent
and the Companies shall cooperate with each other in the preparation of such
Proxy Statement.
(b) As soon as practicable after
the date hereof, Fisher and the Companies shall promptly prepare and file any
other filings required under the Exchange Act, the Securities Act or any other
federal or state securities laws relating to the Mergers and the transactions
contemplated herein ("Other Filings").
6.3 SHAREHOLDERS' APPROVALS. Fisher, in accordance with
applicable law, shall promptly (i) submit for approval by its shareholders the
amendment to Fisher's Articles of Incorporation described in Section
1.4(c)(iii) hereof, and (ii) submit this Agreement and the transactions
contemplated hereby for the ratification of its shareholders; each to occur at
an annual meeting of shareholders (the "Shareholders' Meeting") to be held as
soon as practicable. Subject to the fiduciary duties of the Board of Directors
of the Company under applicable law, Fisher shall use its best efforts to
obtain shareholder approval and ratification.
6.4 PUBLIC ANNOUNCEMENTS. During the Pre-Closing Period,
(a) neither the Parent, the Companies nor any of the Designated Persons shall
(and the Parent and the Companies shall not permit any of their Representatives
to) issue any press release or make any public statement regarding this
Agreement or the Mergers, or regarding any of the other transactions
contemplated by this Agreement, without Fisher's prior written consent, and (b)
Fisher will consult with the Companies prior to issuing any press release or
making any public statement regarding the Mergers.
6.5 BEST EFFORTS. During the Pre-Closing Period, (a) the
Parent, the Companies and the Designated Persons shall use their reasonable
best efforts to cause the conditions set forth in Section 7 to be satisfied on
a timely basis, and (b) Fisher shall use its reasonable best efforts to cause
the conditions set forth in Section 8 to be satisfied on a timely basis.
6.6 EMPLOYMENT AGREEMENT. At the Closing, each of Larry
Fisher and Paul Harrison shall execute and deliver to Fisher Employment
Agreements in a form mutually acceptable to Fisher and the respective
individuals entering into such agreements. In addition, the existing employment
agreements with Larry Fisher and Gordon Random shall be terminated at or prior
to Closing at no expense to Fisher or the Companies.
6.7 TERMINATION OF EMPLOYEE PLANS. At the Closing, other
than existing commission arrangements with its employees, the Companies shall
terminate all bonus plans and other benefit plans under which any of its
employees or former employees may have any rights, and shall ensure that no
employee or former employee of the Companies has any rights thereunder and that
any liabilities of the Companies thereunder (including any such liabilities
relating to services performed prior to the Closing) are fully extinguished at
no cost to the Companies. All employees of the Companies will be included in
the benefit plans of Fisher at no transitional cost to such employees and will
thereafter participate in such benefit plans on the same basis as other
employees of Fisher.
6.8 FIRPTA MATTERS. At the Closing, the Companies shall
deliver to Fisher a statement (in such form as may be reasonably requested by
counsel to Fisher) to the effect that neither of the Companies has been a
United States
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real property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(1)(A)(ii).
6.9 CONVERSION OF PREFERRED STOCK. On or prior to the
Closing Date, all outstanding shares of Fisher convertible preferred stock
shall have been converted into common stock of Fisher and such holders will
have no other rights against Fisher other than as a holder of common stock of
Fisher.
Section 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF FISHER
The obligations of Fisher to effect the Mergers and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
7.1 ACCURACY OF REPRESENTATIONS. Each of the
representations and warranties made by the Companies, the Parent and the
Designated Persons in this Agreement and in each of the other agreements and
instruments delivered to Fisher in connection with the transactions
contemplated by this Agreement shall have been accurate in all material
respects as of the date of this Agreement, and shall be accurate in all
material respects as of the Closing as if made at the Closing.
7.2 PERFORMANCE OF COVENANTS. Each covenant or obligation
that the Companies, the Parent or any of the Designated Persons is required to
comply with or to perform at or prior to the Closing shall have been complied
with and performed in all respects.
7.3 CONSENTS. All Consents required to be obtained in
connection with the Mergers and the other transactions contemplated by this
Agreement (including the Consents identified in Part 2.22 of the Disclosure
Schedule) shall have been obtained and shall be in full force and effect.
7.4 AGREEMENTS AND DOCUMENTS. Fisher shall have received
the following agreements and documents, each of which shall be in full force
and effect:
(a) Employment Agreements
executed by Larry Fisher and Paul Harrison in a form mutually acceptable to
Fisher and the respective individuals entering into such agreements;
(b) the certificate referred to
in Section 6.8, executed by the Companies;
(c) estoppel certificates from
the landlords of the premises currently leased by the Companies, each dated as
of a date not more than five (5) days prior to the Closing Date and
satisfactory in form and content to Fisher, executed by such Persons as Fisher
may reasonably specify;
(d) a legal opinion of
Kilpatrick & Cody, dated as of the Closing Date, in form and substance
reasonably satisfactory to Fisher; and
(e) a certificate executed by
the Companies, the Parent and the Designated Persons and containing the
representation and warranty of the Companies, the Parent and each Designated
Person that each of the representations and warranties set forth in Section 2
is accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 7.1, 7.2, 7.3, 7.4,
7.5 and 7.12 have been duly satisfied (the "Companies' Closing Certificate").
7.5 NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in each of the Companies' respective businesses,
condition, assets, liabilities, operations, financial performance or prospects
since the date of this Agreement.
7.6 TERMINATION OF EMPLOYEE PLANS. The Companies shall
have provided Fisher with evidence, satisfactory to Fisher, as to the
termination of the plans referred to in Section 6.9.
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7.7 FIRPTA COMPLIANCE. The Companies shall have provided
Fisher with the statement described in Section 6.9.
7.8 RULE 506. All applicable requirements of Rule 506
under the Securities Act shall have been satisfied.
7.9 NO RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order preventing the consummation
of the Mergers shall have been issued by any court of competent jurisdiction
and remain in effect, and there shall not be any Legal Requirement enacted or
deemed applicable to the Mergers that makes consummation of the Mergers
illegal.
7.10 NO LEGAL PROCEEDINGS. No Person shall have commenced
or threatened to commence any Legal Proceeding challenging or seeking the
recovery of a material amount of damages in connection with the Mergers.
7.11 FISHER SHAREHOLDERS MEETING. The Shareholders of
Fisher shall have: (i) approved the amendment to Fisher's Articles of
Incorporation described in Section 1.4(c)(iii) hereof; (ii) ratified this
Agreement and the transactions contemplated hereby; and (iii) ratified the
acquisition by Fisher of all of the outstanding capital stock of HALIS
Software, Inc. pursuant to terms of that certain Stock Purchase Agreement dated
March 29, 1996 by and among Fisher, HALIS L.L.C., Paul W. Harrison, James Askew
and Lonnie Herzog (the "HALIS Acquisition").
7.12 RELATED PARTY DEBT. All debt obligations of the
Companies to any Related Parties shall have been paid or canceled, except such
obligations referred to on Exhibit D hereof.
7.13 INVESTMENT CERTIFICATION. Fisher shall have received
a written acknowledgment from each of the Designated Persons receiving common
stock of Fisher in connection with the Mergers that such Designated Person
intends to accept such common stock for investment purposes, such
acknowledgment to be in a form reasonably acceptable to Fisher.
7.14 HALIS ACQUISITION. All conditions to closing for the
HALIS Acquisition pursuant to the Stock Purchase Agreement described in Section
7.11(iii) shall have been satisfied or waived prior to Closing.
Section 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
THE PARENT, THE COMPANIES AND THE DESIGNATED
PERSONS.
The obligations of the Companies, the Parent and the Designated
Persons to effect the Mergers and otherwise consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at or prior to
the Closing, of the following conditions:
8.1 ACCURACY OF REPRESENTATIONS. Each of the
representations and warranties made by Fisher in this Agreement and in each of
the other agreements and instruments delivered to the Parent in connection with
the transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement, and shall be accurate in
all material respects as of the Closing as if made at the Closing.
8.2 PERFORMANCE OF COVENANTS. All of the covenants and
obligations that Fisher is required to comply with or to perform at or prior to
the Closing shall have been complied with and performed in all respects.
8.3 CONSENTS. All Consents required to be obtained in
connection with the merger and the other transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect.
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8.4 AGREEMENTS AND DOCUMENTS.
(a) Fisher shall have entered
into the Employment Agreements described in Section 7.4(a);
(b) The employment agreements
with Larry Fisher and Gordon Random shall have been terminated as contemplated
in Section 6.6
(c) The Parent shall have
received a legal opinion of Smith, Gambrell & Russell in form and substance
reasonably satisfactory to Parent;
(d) The Parent shall have
received a certificate executed by Fisher, and containing the representation
and warranty of Fisher that each of the representations and warranties set
forth in Section 3 is accurate in all material respects as of the Closing Date
as if made on the Closing Date and that the conditions set forth in Sections
8.1, 8.2, 8.3, 8.4 and 8.5 have been duly satisfied (the "Fisher Closing
Certificate").
8.5 FISHER SHAREHOLDER MEETING. The shareholders of
Fisher shall have: (i) approved the amendment to Fisher's Articles of
Incorporation described in Section 1.4(c)(iii) hereof; (ii) ratified this
Agreement and the transactions contemplated hereby; and (iii) ratified the
HALIS Acquisition.
8.6 NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in Fisher's business, condition, assets, liabilities,
operations, financial performance or prospects since the date of this
Agreement.
8.7 NO RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order preventing the consummation
of the Mergers by the Companies shall have been issued by any court of
competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement enacted or deemed applicable to the Mergers that makes consummation
of the Mergers by the Companies illegal.
8.8 NO LEGAL PROCEEDINGS. No Person shall have commenced
or threatened to commence any Legal Proceeding challenging or seeking the
recovery of a material amount of damages in connection with the Mergers or
seeking to prohibit or limit the exercise by Parent of any material right
pertaining to its ownership of stock of Fisher.
8.9 RELATED PARTY DEBT. All debt obligations of Fisher to
any Fisher Related Parties shall have been paid or canceled. For purposes of
this Section 8.9, a "Fisher Related Party" shall mean (i) each individual who
is, or who at any time since December 31, 1992 has been, an officer or director
of Fisher and (ii) each individual who is, or since December 31, 1992 has been,
a member of the immediate family of any of the individuals referred to in
clause (i) above; and (iii) any trust or other Entity (other than Fisher) in
which any one of the individuals referred to in clauses (i) (ii) or (iii) above
holds (or in which more than one of such individuals collectively hold)
beneficially or otherwise, a material voting, proprietary or equity interest.)
8.10 FISHER'S FINANCIAL CONDITION IMMEDIATELY PRIOR TO
CLOSING. Evidence, in form reasonably satisfactory to Parent, is provided that
Fisher, as of December 31, 1995, and without contemplation of the Mergers, had
working capital of no less than $200,000.
8.11 HALIS ACQUISITION. All conditions to the closing of
the HALIS Acquisition pursuant to the Stock Purchase Agreement described in
Section 7.11(iii) shall have been satisfied or waived prior to Closing.
8.12 COMPUCOM WAIVER. Fisher shall have obtained a Consent
and Waiver, in form and substance reasonably acceptable to the Companies, from
Compucom Acquisition Corp. ("Compucom") whereby Compucom consents to Fisher and
the Surviving Corporations marketing their products and services to the
hospitality and healthcare industries and marketing their network integration
products and services to a variety of industries in all geographic areas; and
whereby Compucom waives its rights under Section 1 of the Non-Competition
Agreement between Compucom and Fisher dated March 25, 1994 with respect to the
foregoing activities.
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Section 9. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may be terminated
prior to the Closing:
(a) by Fisher if Fisher
reasonably determines that the timely satisfaction of any condition set forth
in Section 7 has become impossible (other than as a result of any failure on
the part of Fisher to comply with or perform any covenant or obligation of
Fisher set forth in this Agreement);
(b) by the Parent if the Parent
reasonably determines that the timely satisfaction of any condition set forth
in Section 8 has become impossible (other than as a result of any failure on
the part of the Parent, the Companies or any of the Designated Persons to
comply with or perform any covenant or obligation set forth in this Agreement
or in any other agreement or instrument delivered to Fisher);
(c) by Fisher at or after the
Scheduled Closing Time if any condition set forth in Section 7 has not been
satisfied by the Scheduled Closing Time;
(d) by the Parent at or after
the Scheduled Closing Time if any condition set forth in Section 8 has not been
satisfied by the Scheduled Closing Time;
(e) by Fisher if the Closing has
not taken place on or before June 30, 1996 (other than as a result of any
failure on the part of Fisher to comply with or perform any covenant or
obligation of Fisher set forth in this Agreement);
(f) by the Parent if the Closing
has not taken place on or before June 30, 1996 (other than as a result of the
failure on the part of the Parent, the Companies or any of the Designated
Persons to comply with or perform any covenant or obligation set forth in this
Agreement or in any other agreement or instrument delivered to Fisher);
(g) by Fisher under the
circumstances described in Section 4.3(b);
(h) by Parent under the
circumstances described in Section 4.5;
(i) by Fisher under the
circumstances described in Section 5.4;
(j) by Fisher under the
circumstances described in Section 5.5; or
(k) by the mutual consent of
Fisher and the Parent.
9.2 TERMINATION PROCEDURES. If Fisher wishes to terminate
this Agreement pursuant to Section 9.1(a), (c), (e), (g), (i) or (j), Fisher
shall deliver to the Parent a written notice stating that Fisher is terminating
this Agreement and setting forth a brief description of the basis on which
Fisher is terminating this Agreement. If the Parent wishes to terminate this
Agreement pursuant to Section 9.1(b), (d), (f), or (h), the Parent shall
deliver to Fisher a written notice stating that the Parent is terminating this
Agreement and setting forth a brief description of the basis on which the
Parent is terminating this Agreement.
9.3 EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to Section 9.1, all further obligations of the parties
under this Agreement shall terminate; provided, however, that: (a) no party
shall be relieved of any obligation or liability arising from any prior breach
by such party of any provision of this Agreement; (b) the parties shall, in all
events, remain bound by and continue to be subject to the provisions set forth
in Sections 12, as well as paragraph 7 of the Letter of Intent. If Fisher
terminates this Agreement pursuant to Section 9.1(i) it will be liable to the
Companies for the reimbursements and payments described in Section 5.4, in lieu
of any other payments, claims or damages to the Parent, the Companies or the
Designated Persons on account of such termination.
Section 10. INDEMNIFICATION, ETC.
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10.1 INDEMNIFICATION BY THE PARENT AND THE DESIGNATED
PERSONS. The Parent and the Designated Persons, jointly and severally agree to
indemnify Fisher and the Surviving Corporations, and their respective current
and future officers, directors, employees, affiliates, successors and assigns,
and hold them harmless at all times after the date of this Agreement from and
against and in respect of, any and all liabilities, losses, damages,
settlements, claims, costs and expenses, including without limitation
attorneys' fees, arising out of or due to the breach of any representation,
warranty or covenant of the Parent, the Designated Persons or the Companies set
forth in this Agreement or in any of the exhibits or other documents delivered
pursuant hereto relating to an event or condition that arose prior to February
15, 1995, and any and all actions, suits, proceedings, demands, assessments or
judgments, and costs and expenses, incident to any of the foregoing.
Notwithstanding the foregoing, the Parent and the Designated Persons shall have
an obligation to indemnify Fisher and the Surviving Corporations for any breach
of a representation or warranty contained in Section 2 of this Agreement if the
event or condition giving rise to such breach arose after February 15, 1995 and
the Parent, the Companies or the Designated Persons had actual knowledge of
such event or condition on or prior to the date of this Agreement.
10.2 INDEMNIFICATION BY FISHER AND THE SURVIVING
CORPORATION. Fisher and the Surviving Corporations agrees to indemnify the
Parent and its current and future members, officers, directors, employees,
affiliates, successors and assigns, and hold it harmless at all times after the
date of this Agreement from and against and in respect of any and all
liabilities, losses, damages, settlements, claims, costs and expenses,
including, without limitation, attorneys' fees, arising out of or due to the
breach of any representation, warranty or covenant of Fisher set forth in this
Agreement or in any of the exhibits or other documents delivered pursuant
hereto, and any and all actions, suits, proceedings, demands, assessments or
judgments, and costs and expenses, incident to the foregoing.
10.3 LIMITATIONS ON INDEMNIFICATION. Notwithstanding any
provision of this Section 10 to the contrary:
(a) The Parent and the Designated
Persons shall not be liable for payment of any claim for indemnification under
Section 10.1 unless and until the aggregate amount of all indemnifiable claims
under Section 10.1 shall exceed $50,000, in which case the Parent and the
Designated Persons shall be liable only for payment of the amount by which such
claims exceed such $50,000 threshold. The total liability of the Parent and the
Designated Persons under Section 10.1 shall not in any event exceed $250,000 in
the aggregate.
(b) Fisher and the Surviving
Corporations shall not be liable for payment of any claim for indemnification
under Section 10.2 unless and until the aggregate amount of indemnifiable
claims under Section 10.2 shall exceed $50,000, in which case Fisher or the
Surviving Corporations, shall be liable only for payment of the amount by which
such claims exceed such $50,000 threshold. The total aggregate liability of
Fisher and the Surviving Corporations under Section 10.2 shall not in any event
exceed $250,000 in the aggregate.
(c) No party shall have any obligation
with respect to a claim pursuant to Sections 10.1 or 10.2 unless the party
asserting such claim shall have delivered a notice of such claim in good faith
in accordance with Section 10.4(a) on or prior to the first day of the twelfth
(12th) calendar month following the Closing Date.
10.4 PROCEDURE.
(a) The Parent and the
Designated Persons, on the one hand, and Fisher and the Surviving Corporations,
on the other hand, each agree to promptly notify each other if any of them
becomes aware of any liability, loss, damage, settlement, claim, cost or
expense with respect to which indemnity may be asserted under this Section 10
(hereinafter referred to as a "claim"), provided that failure to notify the
indemnifying party shall not relieve such party from liability except to the
extent such party is prejudiced thereby. Failure to deliver a notice prior to
the date referred to in Section 10.3(c) shall, however, absolutely bar any
claim for indemnity for such claim. The party entitled to indemnity (the
"Indemnitee") shall permit the party responsible for such indemnity (the
"Indemnitor") to assume the defense of any such claim or any litigation
resulting from such claim.
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(b) If the Indemnitor assumes
the defense of any such claim or litigation resulting therefrom, the Indemnitee
may participate, at its expense, in the defense of such claim or litigation
provided that the Indemnitor shall direct and control the defense of such claim
or litigation. Except with the written consent of Indemnitee, which consent
shall not be unreasonably withheld, the Indemnitor shall not, in the defense of
such claim or any litigation resulting therefrom, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnitee of a release from all liability in respect of such claim or
litigation.
(c) If the Indemnitor shall not
assume the defense of any such claim or litigation resulting therefrom, the
Indemnitee may defend against such claim or litigation in such manner as it may
deem appropriate. The Indemnitee shall not enter into any settlement of such
claim or litigation without the written consent of the Indemnitor, which
consent shall not be unreasonably withheld. The Indemnitor shall promptly
reimburse the Indemnitee from time to time for any and all amounts paid for or
incurred by the Indemnitee and for which the Indemnitor is obligated pursuant
to this Section 10, upon submission by the Indemnitee of a statement reflecting
the basis upon which such indemnification is sought and the computation of such
amounts.
(d) The Indemnitee shall make
available to the Indemnitor or its Representatives all records and other
materials required by them and in the possession or under control of the
Indemnitee, for the use of the Indemnitor and its Representatives in defending
any such claim, and shall in other respects give reasonable cooperation in such
defense.
Section 11. REGISTRATION OF SHARES
11.1 REGISTRATION STATEMENT.
(a) After the Closing Date,
Fisher shall file with the SEC a registration statement (the "Registration
Statement") with respect to resales of shares of Fisher Common Stock received
in the Mergers by each Participating Holder (as defined in Section 11.1(d)).
Fisher shall use reasonable efforts: (a) to cause the Registration
Statement to be declared effective by the SEC on or before the date 90 days
after the Closing Date; and (b) to cause the Registration Statement to remain
effective until the earlier of (i) the third anniversary of the Closing Date, or
(ii) the date on which the distribution described in the Registration Statement
is completed as to all Participating Holders (as defined in subsection (c)
below).
(b) Fisher shall (at its own
expense):
(i) prepare and file promptly with the SEC such
amendments to the Registration Statement, and
such supplements to the related prospectus, as
may be required in order to comply with the
applicable provisions of the Securities Act,
including, without limitation, to maintain the
effectiveness or currency thereof;
(ii) furnish to the respective Participating Holders
such numbers of copies of a prospectus conforming
to the requirements of the Securities Act as they
may reasonably request in order to facilitate the
disposition of the shares covered by the
Registration Statement; and
(iii) use reasonable efforts to register and qualify
the shares covered by the Registration Statement
under the Securities laws of such states as the
respective Participating Holders may reasonably
request, provided, however, that Fisher shall not
be required in connection therewith or as a
condition thereto to qualify to do business or to
file a general consent to service of process in
any of such states.
(c) Notwithstanding anything to
the contrary herein, no Person who receives Fisher Common Stock in the Mergers
shall have any rights under this Section 11 unless such Person executes and
delivers to Fisher, a
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written agreement, reasonably satisfactory in form and content to Fisher,
confirming that such Person wishes to be allowed to sell Fisher Common Stock
pursuant to the Registration Statement and agrees to be bound by the provisions
of this Section 11. (A Person who holds any of the Fisher Common Stock delivered
in the Mergers and who executes and delivers such an agreement is referred to in
this Section 11 as a "Participating Holder.") Any Participating Holder who
delivers such an agreement more than 30 days after the Closing Date may be
required to pay, as a condition to exercising rights under this Section 11, the
amount of incremental expenses incurred by Fisher in complying therewith. No
Participating Holder shall sell any Fisher Common Stock pursuant to the
Registration Statement at any time Fisher shall have furnished written notice
that the Registration Statement is not then effective or the prospectus that
forms a part thereof is not current.
(d) Notwithstanding anything to
the contrary contained herein, all of Fisher's obligations under this Section
11.1 (including its obligation to file and maintain the effectiveness of the
Registration Statement) shall terminate and expire as of the earliest date on
which all of the shares of Fisher Common Stock issued in the Mergers can be
sold without any restrictions as to volume or manner of sale pursuant to
subsection (k) of Rule 144 under the Securities Act.
11.2 INDEMNIFICATION.
(a) Fisher agrees to indemnify,
to the extent permitted by law, each Participating Holder against all Damages
suffered by such Participating Holder as a result of any untrue or alleged
untrue statement of material fact contained in the Registration Statement or in
the related prospectus or preliminary prospectus (or in any amendment thereof
or supplement thereto) or as a result of any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such untrue statement or omission or
alleged untrue statement or omission results from or is contained in any
information furnished in writing to Fisher by such Participating Holder for use
therein or results from such Participating Holder's failure to deliver a copy
of a Registration Statement or related prospectus (or any amendment thereof or
supplement thereto) after Fisher has furnished such Participating Holder with a
sufficient number of copies thereof.
(b) In connection with the
Registration Statement, each Participating Holder (i) shall furnish to Fisher
in writing such information and affidavits as Fisher reasonably requests for
use in connection with such Registration Statement or the related prospectus,
and (ii) to the extent permitted by law, will indemnify Fisher, its directors
and officers and each Person who controls Fisher (within the meaning of the
Securities Act) against all Damages resulting from any untrue or alleged untrue
statement of material fact contained in such Registration Statement or in the
related prospectus or preliminary prospectus (or in any amendment thereof or
supplement thereto) or from any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission or
alleged untrue statement or omission results from or is contained in any
information or affidavit furnished in writing by such Participating Holder.
(c) Any Person entitled to
indemnification under this Section 11 will (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks
indemnification, and (ii) unless in the indemnified party's reasonable judgment
a conflict of interest exists between the indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any consent to the entry of any judgment or any
settlement made by the indemnified party without the indemnifying party's
consent (but such consent will not be unreasonably withheld). Any indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will pay the fees and expenses of only one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest exists between such
indemnified party and any other indemnified party with respect to such claim
(in which case the indemnifying party will pay the fees and expenses of
additional counsel).
11.3 DELAY OF REGISTRATION. For a period not to exceed 90
days, Fisher may delay the filing or effectiveness of the Registration
Statement, or suspend the use of the Registration Statement (and the
Participating Holders hereby agree not to offer or sell any shares of Fisher
Common Stock pursuant to the Registration Statement during such period),
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<PAGE> 38
at any time when Fisher, in its reasonable judgment (confirmed in writing if
requested by any Participating Holder), believes:
(a) that the filing of a
Registration Statement or the offering or sale of Fisher Common Stock pursuant
thereto, or the making of any required disclosure in connection therewith,
could reasonably be expected to have a material adverse effect upon (i) a
pending or scheduled offering of Fisher's securities, (ii) an acquisition,
merger, consolidation, joint venture, equity investment or other potentially
significant transaction or event, or (iii) any negotiations, discussions or
proposal with respect to any of the foregoing; and
(b) that the failure to disclose
any material information with respect to any of the foregoing could result in a
violation of the Securities Act, the Exchange Act or any provision of any state
securities law.
In the event Fisher reasonably believes that any of the foregoing circumstances
are continuing after such 90-day period, it may, with the consent of the
holders of a majority of the shares of Fisher Common Stock subject (or to be
subject) to the Registration Statement (which consent shall not be unreasonably
withheld) extend such 90-day period for one additional 30-day period.
11.4 AMENDMENT OF SECTION 11. Notwithstanding anything to
the contrary contained in this Agreement, the provisions of this Section 11 may
be amended by Fisher at any time with the consent of the holders of a majority
of the shares of Fisher Common Stock that are at that time subject (or to be
subject) to the Registration Statement.
Section 12. MISCELLANEOUS PROVISIONS
12.1 DESIGNATED PERSONS' AGENT. The Designated Persons
hereby irrevocably appoint Paul W. Harrison as their agent for purposes of
Sections 10 and 12.10(d) (the "Designated Persons' Agent"), and Paul W.
Harrison hereby accepts this appointment as the Designated Persons' Agent.
Fisher shall be entitled to deal exclusively with the Designated Persons' Agent
on all matters relating to Sections 10 and 12.10(d), and shall be entitled to
rely conclusively (without further evidence of any kind whatsoever) on any
document executed or purported to be executed on behalf of any Designated Person
by the Designated Persons' Agent, and on any other action taken or purported to
be taken on behalf of any Designated Person by the Designated Persons' Agent, as
fully binding upon such Designated Person. If the Designated Persons' Agent
shall die, become disabled or otherwise be unable to fulfill his
responsibilities as agent of the Designated Persons, then the Designated Persons
shall, within ten (10) days after such death or disability, appoint a successor
agent and, immediately thereafter, shall notify Fisher of the identity of such
successor. Any such successor shall become the "Designated Persons' Agent" for
purposes of Sections 10 and 12.10(d). If for any reason there is no Designated
Persons' Agent at any time, all references herein to the Designated Persons'
Agent shall be deemed to refer to the Designated Persons.
12.2 FURTHER ASSURANCES. Each party hereto shall execute
and cause to be delivered to each other party hereto such instruments and other
documents, and shall take such other actions, as such other party may
reasonably request (prior to, at or after the Closing) for the purpose of
carrying out or evidencing any of the transactions contemplated by this
Agreement.
12.3 FEES AND EXPENSES. Subject to Sections 10 and 5.4,
all fees, costs and expenses (including legal fees and accounting fees) that
have been incurred or that are incurred in the future by such party in
connection with the transactions contemplated by this Agreement, including all
fees, costs and expenses incurred by such party in connection with or by virtue
of (a) any investigation and review conducted by such party of the other
parties' business (and the furnishing of information in connection with such
investigation and review), (b) the negotiation, preparation and review of this
Agreement (including the Disclosure Schedule) and all agreements, certificates,
opinions and other instruments and documents delivered or to be delivered in
connection with the transactions contemplated by this Agreement, (c) the
preparation and submission of any filing or notice required to be made or given
in connection with any of the transactions contemplated by this Agreement, and
the obtaining of any Consent required to be obtained in connection with any of
such transactions, and (d) the consummation of the Mergers (collectively, the
"Merger Fees") shall be paid: (i) by Fisher,
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<PAGE> 39
if incurred by Fisher or the Merger Subs; and (ii) by the Companies, if incurred
by the Companies, Parent or the Designated Persons.
12.4 ATTORNEYS' FEES. If any action or proceeding relating
to this Agreement or the enforcement of any provision of this Agreement is
brought against any party hereto, the prevailing party shall be entitled to
recover reasonable attorneys' fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).
12.5 NOTICES. Any notice or other communication required
or permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile telephone number set forth beneath
the name of such party below (or to such other address or facsimile telephone
number as such party shall have specified in a written notice given to the
other parties hereto):
if to Fisher:
Fisher Business Systems, Inc.
1950 Spectrum Circle
Suite 400
Marietta, Georgia 30067
Attention: Larry Fisher, President
Facsimile: (404) 992-3404
with a copy to:
Smith, Gambrell & Russell
3343 Peachtree Road, N.E.
Suite 1800
Atlanta, Georgia 30326-1010
Attn: William L. Meyer, Esq.
Facsimile: (404) 264-2652
if to the Parent:
AUBIS, L.L.C.
200 Hembree Park Drive
Suite K
Roswell, Georgia 30076
Attn: Paul Harrison, Chairman & CEO
Facsimile: (770) 667-2129
with a copy to:
Kilpatrick & Cody
1100 Peachtree Street, Suite 2800
Atlanta, Georgia 30309-4530
Attn: Brian L. Schleicher, Esq.
Facsimile: (404) 815-6555
-38-
<PAGE> 40
if to the Companies:
AUBIS Hospitality Systems, Inc.
200 Hembree Park Drive
Suite K
Roswell, Georgia 30076
Attn: Paul W. Harrison
Facsimile: (770) 667-2129
AUBIS Systems Integration, Inc.
200 Hembree Park Drive
Suite K
Roswell, Georgia 30076
Attn: Paul W. Harrison
Facsimile: (770) 667-2129
if to any of the Designated Persons:
c/o Paul W. Harrison
200 Hembree Park Drive
Suite K
Roswell, Georgia 30076
Facsimile: (770) 667-2129
12.6 CONFIDENTIALITY. On and at all times after the
Closing Date, the Parent and each Designated Person shall keep confidential,
and shall not use or disclose to any other Person, any non-public document or
other non- public information in the Parent's or such Designated Person's
possession that relates to the business of the Companies or Fisher.
12.7 TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
12.8 HEADINGS. The bold-faced Section headings contained
in this Agreement are for convenience of reference only, shall not be deemed to
be a part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
12.9 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement.
12.10 GOVERNING LAW; VENUE.
(a) This Agreement shall be
construed in accordance with, and governed in all respects by, the internal
laws of the State of Georgia (without giving effect to principles of conflicts
of laws).
(b) Any legal action or other
legal proceeding relating to this Agreement or the enforcement of any provision
of this Agreement may be brought to otherwise commenced in any state or federal
court located in Fulton County, Georgia. Each party to this Agreement:
(i) expressly and irrevocably consents and submits to
the jurisdiction of each state and federal court
located in Fulton County, Georgia (and each
appellate court located in the State of Georgia)
in connection with any such legal proceeding;
(ii) agrees that each state and federal court located
in Fulton County, Georgia shall be deemed to be a
convenient forum; and
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<PAGE> 41
(iii) agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal
proceeding commenced in any state or federal
court located in Fulton County, Georgia, any
claim that such party is not subject personally
to the jurisdiction of such court, that such
legal proceeding has been brought in an
inconvenient forum, that the venue of such
proceeding is improper or that this Agreement or
the subject matter of this Agreement may not be
enforced in or by such court.
(c) The Designated Persons
irrevocably constitute and appoint the Designated Persons' Agent as their agent
to receive notices hereunder and service of process in connection with any
legal proceeding relating to this Agreement or the enforcement of any provision
of this Agreement.
12.11 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon: the Parent, the Companies and their successors and assigns (if
any); the Designated Persons and their respective personal representatives,
executors, administrators, estates, heirs, successors and assigns (if any);
Fisher and its successors and assigns (if any). This Agreement shall inure to
the benefit of: the Parent, the Designated Persons; Fisher; and the respective
successors, heirs personal representatives and assigns (if any) of the
foregoing.
12.12 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights
and remedies of the parties hereto shall be cumulative (and not alternative).
The parties to this Agreement agree that, in the event of any breach of
threatened breach by any party to this Agreement of any covenant, obligation or
other provision set forth in this Agreement for the benefit of any other party
to this Agreement, such other party shall be entitled (in addition to any other
remedy that may be available to it) to (a) a decree or order of specific
performance or mandamus to enforce the observance and performance of such
covenant, obligation or other provision, and (b) an injunction restraining such
breach or threatened breach.
12.13 WAIVER.
(a) No failure on the part of
any party to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of any party in exercising any power,
right, privilege or remedy under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single or partial exercise of
any such power, right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or remedy.
(b) No party shall be deemed to
have waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of such party; and any such
waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
12.14 AMENDMENTS. Subject to Section 11.4, this Agreement
may not be amended, modified, altered or supplemented other than by means of a
written instrument duly executed and delivered on behalf of all of the parties
hereto.
12.15 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as
to which it is determined to be invalid, unlawful, void or unenforceable, shall
not be impaired or otherwise affected and shall continue to be valid and
enforceable to the fullest extent permitted by law.
12.16 PARTIES IN INTEREST. Except for the provisions of
Section 10, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors, heirs, personal representatives and assigns (if any).
-40-
<PAGE> 42
12.17 ENTIRE AGREEMENT. This Agreement and the other
agreements referred to herein set forth the entire understanding of the parties
hereto relating to the subject matter hereof and thereof and supersede all
prior agreements and understandings among or between any of the parties
relating to the subject matter hereof and thereof, including without limitation
the Letter of Intent (other than paragraph 7 thereof, which shall survive to
the extent provided herein).
12.18 CONSTRUCTION.
(a) For purposes of this
Agreement, whenever the context requires: the singular number shall include the
plural, and vice versa; the masculine gender shall include the feminine and
neuter genders; the feminine gender shall include the masculine and neuter
genders; and the neuter gender shall include the masculine and feminine
genders.
(b) The parties hereto agree
that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in the construction or
interpretation of this Agreement.
(c) As used in this Agreement,
the words "include" and "including," and variations thereof, shall not be
deemed to be terms of limitation, but rather shall be deemed to be followed by
the words "without limitation."
(d) Except as otherwise
indicated, all references in this Agreement to "Sections" and "Exhibits" are
intended to refer to Sections of this Agreement and Exhibits to this Agreement.
The parties hereto have caused this Amended and Restated Agreement to
be restated, executed and delivered as of March 29, 1996.
"FISHER"
FISHER BUSINESS SYSTEMS, INC.,
a Georgia corporation
By: /s/ Larry Fisher
-------------------------------------
Its: President
------------------------------------
"PARENT"
AUBIS, L.L.C.,
a Georgia limited liability company
By: /s/ Paul W. Harrison
-------------------------------------
Its: Managing Member
------------------------------------
"COMPANIES"
AUBIS HOSPITALITY SYSTEMS, INC.,
a Georgia corporation
By: /s/ Paul W. Harrison
-------------------------------------
Title: President
----------------------------------
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<PAGE> 43
AUBIS SYSTEMS INTEGRATION, INC.,
a Georgia corporation
By: /s/ Paul W. Harrison
------------------------------------
Title: President
---------------------------------
"DESIGNATED PERSONS"
PAUL HARRISON ENTERPRISES, INC.
By: /s/ Paul Harrison
-----------------------------------------
Paul Harrison
Its: President
----------------------------------------
/s/ Nathan L. Lipson
--------------------------------------------
Nathan L. Lipson, in his individual capacity
/s/ Gordon E. Random
--------------------------------------------
Gordon E. Random, in his individual capacity
/s/ Paul Harrison
--------------------------------------------
Paul Harrison, in his individual capacity
-42-
<PAGE> 44
EXHIBIT A
Designated Persons
Names
-----
Paul Harrison Enterprises, Inc.
Paul Harrison
Nathan L. Lipson
Gordon E. Random
-43-
<PAGE> 45
EXHIBIT B
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit B):
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition
of all or a material portion of the Companies' businesses or assets;
(b) the issuance, disposition or acquisition of
(i) any capital stock or other equity security of the Companies, Fisher
or the Merger Subs, as the case may be; (ii) any option, call, warrant
or right (whether or not immediately exercisable) to acquire, or
otherwise relating to, any capital stock or other equity security of
the Companies, Fisher or the Merger Subs, as the case may be; or (iii)
any security, instrument or obligation that is or may become
convertible into or exchangeable for any capital stock or other equity
security of the Companies, Fisher or the Merger Subs, as the case may
be; or
(c) any merger, consolidation, business
combination, share exchange, reorganization or similar transaction
involving the Companies, Fisher or the Merger Subs, as the case may be.
AGREEMENT. "Agreement" shall mean the Amended and Restated Agreement
and Plan of Merger and Reorganization to which this Exhibit B is attached
(including the Disclosure Schedule), as it may be further amended from time to
time.
COMPANY CONTRACT. "Company Contract" shall mean any Contract: (a) to
which the Companies are a party; (b) by which the Companies or any of their
assets are or may become bound or under which the Companies have, or may become
subject to, any obligation; or (c) under which the Companies have or may
acquire any right or interest.
COMPANY PROPRIETARY ASSET. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Companies or otherwise used by
the Companies.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule
(dated as of the date of the Agreement) delivered to Fisher on behalf of the
Parent, the Companies and the Designated Persons.
EMPLOYEE BENEFIT PLAN. "Employee Benefit Plan" shall have the meaning
specified in Section 3(3) of ERISA.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on
the voting of any security, any restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other
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<PAGE> 46
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
ENVIRONMENTAL LAW. "Environmental Law" means any federal, state, local
or foreign Legal Requirement relating to pollution or protection of human
health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean
any: (a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement; or (b) right under any Contract with any
Governmental Body.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry,
audit, examination or investigation commenced, brought, conducted or heard by
or before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitute, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Body.
MATERIAL ADVERSE EFFECT. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Companies if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement or
in the Parent's and Designated Persons' Closing Certificate but for the
presence of "Material Adverse Effect" or other materiality qualifications, or
any similar qualifications, in such representations and warranties) would have
a material adverse effect on either of the Companies' business, condition,
assets, liabilities, operations, financial performance or prospects.
MATERIALS OF ENVIRONMENTAL CONCERN. "Materials of Environmental
Concern" include chemicals, pollutants, contaminants, wastes, toxic substances,
asbestos, PCBs, petroleum and petroleum products and any other substance that
is now or in the future regulated by any Environmental Law or that is otherwise
a danger to health, reproduction or the environment.)
PERSON. "Person" shall mean any individual, Entity or Governmental
Body.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (a) patent,
patent application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, source code, computer program, invention, design, blueprint,
engineering drawing, proprietary product, technology, proprietary right or
other intellectual property right or intangible asset; or (b) right to use or
exploit any of the foregoing.
REPRESENTATIVES "Representatives" shall mean officers, directors,
employees, agents, attorneys, accounts, advisors and representatives.
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<PAGE> 47
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of
1933, as amended.
TAX. "Tax" shall mean any tax (including any income tax, franchise
tax, capital gains tax, gross receipts tax, value-added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, withholding tax or payroll tax), levy, assessment, tariff, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or
collected by or under the authority of any Governmental Body.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule,
notice, notification, form, election, certificate or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
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<PAGE> 48
EXHIBIT C
Directors and Officers of Fisher and Surviving Corporations After the Mergers
A. FISHER
------
Directors
---------
1. Larry Fisher
2. Jim Dixon
3. Jeff Brenner
4. Paul W. Harrison
5. Nate Lipson
6. [To be determined by Paul W. Harrison]
7. [To be determined mutually by Paul W. Harrison and Larry Fisher]
Officers
--------
Paul W. Harrison - Chairman & CEO
Larry Fisher - President & COO
B. SURVIVING CORPORATION #1 (AHS MERGER SUB)
Directors
---------
Paul W. Harrison
Larry Fisher
Nate Lipson
Officers
--------
Paul W. Harrison - Chairman and Chief Executive Officer
Adam J. Waxman - President and Chief Operating Officer
C. SURVIVING CORPORATION #2 (ASI MERGER SUB)
Directors
---------
Paul W. Harrison
Larry Fisher
Nate Lipson
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<PAGE> 49
Officers
--------
Paul W. Harrison - Chairman and Chief Executive Officer
Adam J. Waxman - President and Chief Operating Officer
-48-
<PAGE> 50
EXHIBIT D
Related Party Debt
(1) Indebtedness payable to AUBIS, L.L.C. in an amount not to exceed
$107,500.
(2) Promissory Notes payable to Nathan I. Lipson in the original amount
of:
<TABLE>
<CAPTION>
Date
----
<S> <C> <C>
$ 10,000 07/15/94
$ 32,000 08/22/94
$ 5,000 10/06/95
$ 6,000 10/18/94
$ 6,000 11/01/94
$ 6,000 12/15/95
$100,000 02/08/96
--------
Total $165,000
=======
</TABLE>
(3) Promissory Note from AHS payable to Debbi L. Blackburn dated November
17, 1995 in the principal amount of $21,100 as replaced by that
certain Promissory Note dated March 28, 1996 in the original principal
amount of $37,527.15.
(4) Promissory Note from AHS payable to Paul W. Harrison in the original
amount of $9,000 dated December 19, 1995.
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<PAGE> 1
EXHIBIT 10.18
<PAGE> 2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 7th day of February, 1996, by and between Fisher Business Systems, Inc.,
a Georgia corporation (the "Company"), and Larry Fisher (hereinafter
"Executive");
WHEREAS, in contemplation of the consummation of that certain Agreement
and Plan of Merger and Reorganization dated December 13, 1995 among the Company
and AUBIS, L.L.C. and its affiliates ("AUBIS") providing for the acquisition by
the Company of two wholly-owned subsidiaries of AUBIS (the "AUBIS
Transaction"), this Agreement amends and restates that certain employment
agreement entered into as of May 8, 1995 by and between the Company and
Executive;
WHEREAS, the Company, recognizing the experience and knowledge of
Executive in the restaurant software industry, and the importance of Executive
in preserving and maintaining the goodwill of the Company, desires to retain
the valuable services and business counsel of Executive, it being in the best
interests of the Company to arrange terms of employment for Executive so as to
reasonably induce Executive to remain in his capacities with the Company for
the term hereof; and
WHEREAS, Executive is willing to accept such employment with the
Company, in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. For the Term of Employment, as hereinafter defined,
the Company agrees to employ Executive and Executive agrees to accept such
employment and to perform such duties and functions as the Boards of Directors
of the Company may assign to Executive from time to time, but only
administrative and managerial functions commensurate with Executive's past
experience and performance level. Unless otherwise agreed to by Executive, he
shall perform such duties primarily from the Company's offices in Atlanta,
Georgia. Executive agrees to devote his full time and energy to the business
of the Company, and shall perform his duties in a trustworthy and businesslike
manner, all for the purpose of advancing the interests of the Company. It is
hereby expressly agreed among the parties hereto that primary responsibility
for the supervision of Executive shall rest with the Board of Directors of the
Company, which shall review Executive's performance annually, make upward
adjustments to Executive's compensation and award such other bonuses and
employee benefits as it shall deem appropriate.
2. TITLE. Initially, Executive shall serve as Chairman of the
Board of Directors, President and Chief Executive Officer of the Company. Upon
consummation of the AUBIS Transaction, Executive shall relinquish his title as
Chairman of the Board of Directors and Chief Executive Officer and shall serve
as the President and Chief Operating Officer of the Company.
3. TERM OF EMPLOYMENT. The "Term of Employment" referred to in
Section 1 hereof and hereinafter shall commence on the date hereof and expire
on December 31, 1998 unless otherwise terminated prior thereto in accordance
with the terms of this Agreement.
-1-
<PAGE> 3
4. COMPENSATION.
4.1 Base Salary. During the Term of Employment, Executive shall be
paid an annual base salary (hereinafter "Base Salary"), which shall be paid in
installments in accordance with the Company's normal pay practices, but not
less frequently than monthly. Executive's initial annual Base Salary for the
initial twelve (12) months of this Agreement shall be $175,000. The Board of
Directors of the Company shall review Executive's Base Salary annually and
adjust the Base Salary in accordance with the terms of Exhibit A attached
hereto and incorporated herein.
4.2 Incentive Compensation. During the Term of Employment, and in
addition to Executive's Base Salary, Executive shall be eligible to receive an
annual bonus determined in accordance with the procedure set forth in Exhibit
A. Each year the Board of Directors shall establish reasonable objectives for
the operations of the Company ("Objectives"). Executive shall receive an
annual bonus based on the Company's attainment of the Objectives during the
immediately preceding fiscal year in accordance with the terms of Exhibit A.
4.3 Stock Options. In addition to any additional benefits as provided
in Section 4.4 hereof, as an incentive for successful management of the Company
by Executive, the Board of Directors may, in its discretion, grant to Executive
the right to purchase shares of the common stock of the Company at a price
determined by the Board of Directors on the date of Grant. Such options shall
be issued on such terms and conditions as are determined reasonable by the
Board of Directors of the Company.
4.4 Additional Benefits. During the Term of Employment,
Executive shall have the right to participate in any and all employee benefit
programs established and maintained by the Company from time to time including,
without limitation, such medical or dental plans as may be established from
time to time by the Company. Executive shall be entitled to participate in any
qualified or unqualified stock option, pension, profit sharing or other
employee benefit plan adopted by the Company or its affiliates hereinafter and
covering officers of the Company generally. Throughout the Term of Employment,
Executive shall also be entitled to reimbursement for reasonable business
expenses incurred by him in the performance of his duties hereunder. In
addition, the Company shall provide Executive, at the Company's expense, (i)
medical insurance coverage for Executive and his family, and (ii) an automobile
allowance of $500 per month plus reasonable expenses related thereto.
4.5 Vacation. Executive shall be entitled to six (6) weeks
annual vacation leave, with pay but with no accrual of vacation time from year
to year. Vacation shall be scheduled at reasonable times not in conflict with
Executive's duties hereunder.
5. ILLNESS, INCAPACITY OR DEATH DURING EMPLOYMENT.
(a) If by reason of illness or incapacity, Executive is
unable to perform his services or discharge his duties hereunder for sixty (60)
or more consecutive days or ninety (90) days in the aggregate during any twelve
(12) month period, Executive and the Company agree that Executive shall have
demonstrated an inability to perform an essential function of his job
responsibilities. Accordingly, upon ten (10) days' prior notice, the Company
may, in its sole discretion, either suspend Executive without pay of any kind,
salary or bonus, until Executive is able to perform his services and discharge
-2-
<PAGE> 4
his duties hereunder or terminate the employment of Executive, and thereupon,
Executive shall be paid his base salary from the date of termination through
the 10-day notice period.
(b) In the event of Executive's death, all obligations of
the Company under this Agreement shall terminate other than the payment of that
portion of the base salary and incentive compensation, if any, earned by
Executive to the date of death.
6. TERMINATION.
6.1 For Cause. This Agreement may be terminated by the Board of
Directors of the Company immediately and without further obligation than for
monies already paid, for any of the following reasons:
(a) inattention to or substandard performance of the
services required of Executive hereunder;
(b) failure of Executive to follow reasonable written
instructions or policies of the Boards of Directors;
(c) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company during the Term of
Employment, or at any time while he was employed by the Company prior to the
Term of Employment as defined herein, if not disclosed to the Company prior to
the commencement of the Term of Employment;
(d) conviction of Executive during the Term of Employment
of a crime involving breach of trust or moral turpitude; or
(e) engaging in any act or activity prohibited under the
terms of this Agreement.
In the event that the Company discharges Executive alleging "cause"
under this Section 6.1 and it is subsequently determined judicially that the
termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 6.2 hereof. In
the event that the Company discharges Executive alleging "cause" under this
Section 6.1, such notice of discharge shall be accompanied by a written and
specific description of the circumstances alleging such "cause."
6.2 Without Cause. The Company may, upon thirty (30) days' written
notice to Executive, terminate this Agreement without cause at any time during
the Term of Employment. In such event, the Company shall pay Executive, as
liquidated damages in lieu of all other claims, the greater of one year's
annual Base Salary of Executive on the date of termination or an amount equal
to the Base Salary which would otherwise be payable to Executive for the
remaining Term of Employment, plus the cost for one year of all additional
benefits provided to Executive pursuant to Section 4.4 hereof. Any such
payment shall, at the option of the Company, be made either in equal monthly
installments over the greater of twelve months or the remaining Term of
Employment or in a lump sum cash payment on the date of termination at a
discounted present value of 8% per year.
-3-
<PAGE> 5
6.3 By Executive. Executive may, upon thirty (30) days' written
notice to the Company, terminate this Agreement if, at any time during the Term
of Employment, the duties, responsibilities and powers of Executive shall be
reduced or diminished in such a way as to be inconsistent with the status of
Executive as a founder and executive officer of the Company and a recognized
leader in the software industry. In such event, the Company shall pay
Executive, as liquidated damages in lieu of all other claims, the greater of
one year's annual Base Salary of Executive on the date of termination or an
amount equal to the Base Salary which would otherwise be payable to Executive
for the remaining Term of Employment, plus the cost for one year of all
additional benefits provided to Executive pursuant to Section 4.4 hereof. Any
such payment shall, at the option of the Company, be made either in equal
monthly installments over the greater of twelve months or the remaining Term of
Employment or in a lump sum cash payment on the date of termination at a
discounted present value of 8% per year.
6.4 Change in Control.
(a) In the event of a "change in control" of the Company,
Executive shall be entitled, for a period of one (1) year from the date of
closing of the transaction effecting such change in control and at his
election, to give written notice to the Company of termination of this
Agreement and to receive an amount equal to two times the annual Base Salary of
Executive on the date of termination, plus twice the cost for one year of all
additional benefits provided to Executive pursuant to Section 4.4 hereof. Any
such payment shall, at the option of the Company, be made either in equal
monthly installments over two years or in a lump sum cash payment on the date
of termination at a discounted present value of 8% per year.
(b) For purposes of this Section 6.4, "change in control"
of the Company shall mean:
(i) Any transaction occurring after the closing of
the AUBIS Transaction and the acquisition of HALIS
Software, Inc., whether by merger, consolidation, asset
sale, tender offer, reverse stock split or otherwise,
which results in the acquisition or beneficial
ownership (as such term is defined under rules and
regulations promulgated under the Securities Exchange
Act of 1934, as amended) by any person or entity or any
group of persons or entities acting in concert, of 25%
or more of the outstanding shares of the common stock
of the Company;
(ii) The sale of all or substantially all of the
assets of the Company; or
(iii) The liquidation of the Company, other than in
respect to a proceeding under federal bankruptcy or
insolvency laws.
6.5 Executive's Obligations Upon Termination. Upon the termination
of his employment hereunder for whatever reason, Executive shall:
(a) Forthwith tender his resignation from any office he may
hold in the Company; and
(b) Not at any time represent himself still to be connected
or to have any connection with the Company.
-4-
<PAGE> 6
6.6 Effect of Termination. The provisions contained in this
Agreement shall survive the termination of this Agreement and the termination
of Executive's employment with the Company to the extent required to give full
effect to the covenants and agreements contained herein.
7. CONFIDENTIALITY.
(a) Subject to Section 7(b) below, Executive agrees that,
both during the term of this Agreement and after the termination of this
Agreement, Executive will hold in a fiduciary capacity for the benefit of the
Company, and shall not directly or indirectly use or disclose, except as
authorized by the Company in connection with the performance of Executive's
duties, any Confidential Information, as defined hereinafter, that Executive
may have or acquire (whether or not developed or compiled by Executive and
whether or not Executive has been authorized to have access to such
Confidential Information) during the term of this Agreement. The term
"Confidential Information" as used in this Agreement shall mean and include any
information, data and know-how relating to the business of the Company or its
affiliates that is disclosed to Executive by the Company or its affiliates or
known by him as a result of his relationship with the Company and not generally
within the public domain (whether constituting a trade secret or not),
including without limitation, the following information:
(i) financial information, such as the Company's or its
affiliates' earnings, assets, debts, prices, fee structure,
volumes of purchases or sales or other financial data, whether
relating to the Company or their affiliates generally, or to
particular products, services, geographic areas or time periods;
(ii) supply and service information, such as information
concerning the goods and services utilized or purchased by the
Company or its affiliates, the names or addresses of suppliers,
terms of supply or service contracts, or of particular
transactions, or related information about potential suppliers,
to the extent that such information is not generally known to
the public, and to the extent that the combination of suppliers
or use of a particular supplier, though generally known or
available, yields advantages to the Company or its affiliates
the details of which are not generally known;
(iii) marketing information, such as details about ongoing or
proposed marketing programs or agreements by or on behalf of the
Company or its affiliates, marketing forecasts or results of
marketing efforts or information about impending transactions;
(iv) personnel information relating to the Company or its
affiliates, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed
promotions, hiring, resignations, disciplinary actions,
terminations or reasons therefor, training methods, performance
or other employee information;
(v) customer information relating to the Company or its
affiliates, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between
customers and the Company or its affiliates, status of customer
accounts or credit, or related information about actual or
prospective customers; and
-5-
<PAGE> 7
(vi) information with respect to any corporate affairs that
the Company or its affiliates agreed to treat as confidential.
The term "Confidential Information" does not include information that has
become generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenants contained in this Section 7 shall survive
the termination of Executive's employment with the Company for any reason for a
period of three (3) years; provided, however, that with respect to those items
of Confidential Information which constitute trade secrets under applicable
law, Executive's obligations of confidentiality and non-disclosure as set forth
in this Section 8 shall continue to survive after said three (3) year period to
the greatest extent permitted by applicable law. These rights of the Company
are in addition to those rights the Company has under the common law or
applicable statutes for the protection of trade secrets.
8. NON-COMPETITION.
(a) Executive acknowledges that he will perform services
hereunder which directly affect the Company's business presently conducted
within the territory comprised of any area located within the continental
United States (the "Territory"). Accordingly, the parties hereto deem it
necessary to enter into the protective agreement set forth below, the terms and
conditions of which have been negotiated by and between the parties hereto.
(b) Executive agrees with the Company that for so long as
he is employed by the Company hereunder, and for a period of two (2) years
after the termination date of his employment hereunder (provided that the
reason for such termination is for cause, because of voluntary termination by
him other than pursuant to Section 6.3 hereof or because of the expiration of
this Agreement), Executive shall not, without the prior written consent of the
Company, within the geographical limits of the Territory, either directly or
indirectly engage in, or perform managerial or executive services of the same
type performed or to be performed by Executive pursuant to this Agreement for,
any business or organization that engages in the sale or distribution of
restaurant management systems and support services of the type offered or
provided by the Company if the Company or its affiliates or successors are then
engaged in the business of the sale or distribution of restaurant management
systems and support services in the Territory; provided, however, that nothing
contained in this Section 8(b) shall prohibit Executive following the
termination of this Agreement from performing sales functions or sales
responsibilities of a non-managerial or executive nature for a business or
organization that engages in the sale or distribution of restaurant management
systems and support services of the type offered or provided by the Company, so
long as Executive does not thereby breach his obligations under Section 8(c) of
this Agreement.
(c) Executive agrees that he will not take any customer
lists of the Company after leaving his employ and that he will, for so long as
he is employed by the Company hereunder, and for a period of two (2) years
after the termination date of his employment hereunder (provided that the
reason for such termination is for cause, because of voluntary termination by
him other than pursuant to Section 6.3 hereof or because of the expiration of
this Agreement), refrain from soliciting or attempting to solicit directly or
indirectly or by assisting others, any business from any of the
-6-
<PAGE> 8
Company's customers, including actively sought prospective customers, with whom
Executive had material contact during his employment for purposes of providing
products or services that are similar to or competitive with those provided by
the Company, namely restaurant management systems and support services of the
type offered or provided by the Company.
(d) Executive agrees with the Company that for so long as
he is employed by the Company hereunder, and for a period of two (2) years
after the termination date of his employment hereunder (provided that the
reason for such termination is for cause, because of voluntary termination by
him other than pursuant to Section 6.3 hereof or because of the expiration of
this Agreement), refrain from recruiting or hiring, or attempting to recruit or
hire, directly or by assisting others, any employee of the Company who is
employed by the Company or any successor or affiliates of the Company if the
Company or its successor or affiliates is then engaged in the business of the
sale and distribution of restaurant management systems and support services of
the type offered or provided by the Company.
(e) The covenants of Executive set forth in this Section 8
are separate and independent covenants for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce the Company to enter
into this Agreement. The aforesaid covenants may be availed of or relied upon
by the Company in any court of competent jurisdiction, and shall form the basis
of injunctive relief and damages including expenses of litigation (including
but not limited to reasonable attorney's fees) suffered by the Company arising
out of any breach of the aforesaid covenants by Executive. The covenants of
Executive set forth in this Section 8 are cumulative to all other covenants of
Executive in favor of the Company contained in this Agreement and shall survive
the termination of this Agreement for the purposes intended. Should any
covenant, term or condition contained in this Section 8 become or be declared
invalid or unenforceable by a court of competent jurisdiction, then the parties
request that such court judicially modify such unenforceable provision
consistent with the intent of Section 8 so that it shall be enforceable as
modified, and in any event the invalidity of any provision of Section 8 shall
not affect the validity of any other provision in Section 8 or elsewhere in
this Agreement.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto, including that
certain Employment Agreement dated as of May 8, 1995 by and between the Company
and Executive.
10. ASSIGNMENT. Neither of the parties hereto may assign this
Agreement without the prior written consent of the other party hereto.
11. SEVERABILITY. Each section and subsection of this Agreement
constitutes a separate and distinct understanding, covenant and provision
hereof. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be deemed to be severed from
this Agreement, but every other provision of this Agreement shall remain in
full force and effect.
12. GOVERNING LAW. This Agreement shall in all respects be
interpreted, construed and governed by and in accordance with the laws of the
State of Georgia.
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<PAGE> 9
13. RIGHTS OF THIRD PARTIES. Nothing herein, expressed or implied,
is intended to or shall be construed to confer upon or give to any person, firm
or other entity, other than the parties hereto and their permitted assigns, any
rights or remedies under or by reason of this Agreement.
14. AMENDMENT. This Agreement may not be amended orally but only by
an instrument in writing duly executed by the parties hereto.
15. NOTICES. Any notice or other document or communication
permitted or required to be given to Executive pursuant to the terms hereof
shall be deemed given if personally delivered to Executive or sent to him,
postage prepaid, by registered or certified mail, at 1304 Hatton Walk,
Marietta, Georgia 30068, or any such other address as Executive shall have
notified the Company in writing. Any notice or other document or other
communication permitted or required to be given to the Company pursuant to the
terms hereof shall be deemed given if personally delivered or sent to the
Company, postage prepaid, by registered or certified mail, at 1950 Spectrum
Circle, Suite 400, Marietta, Georgia 30067, or at such other address as the
Company shall have notified Executive in writing.
16. WAIVER. The waiver by either party hereto of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach of the same or any other provision of this
Agreement by the breaching party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
FISHER BUSINESS SYSTEMS, INC.
By: /s/ Larry Fisher
------------------------------------
Larry Fisher, Chairman
EXECUTIVE:
/s/ Larry Fisher (SEAL)
----------------------------------
LARRY FISHER
-8-
<PAGE> 10
EXHIBIT A
EXECUTIVE COMPENSATION PLAN
<TABLE>
<S> <C> <C> <C> <C>
Purpose: To compensate Paul Harrison and Larry Fisher Variable Compensation Targets
for performance related to the accomplishment of 1996 $0.04 E.P.S.
the corporation 1997 $0.08 E.P.S.
1998 $0.15 E.P.S.
Term: 3 years beginning 1/1/96. Based on average # shares during year
</TABLE>
Base Salary -- Set initially and adjusted annually based on annual performance.
Variable Compensation -- Level determined by performance versus targets
set by Board.
Employee Stock Options -- Awarded annually based on increased shareholder value.
<TABLE>
<CAPTION>
Base Salary 1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Paul Harrison, Chairman, CEO $200,000 (1) (2)
Larry Fisher, President $175,000 (1) (2)
</TABLE>
(1) (2) Standard increase is 10% from previous base -- Modified up or
down 1/2% for each 1% over or under target
Variable Compensation --
<TABLE>
<CAPTION>
% of target accomplished 60% 80% 100% 120% 200% >200%
--- --- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
% of variable compensation paid Paul 20% 30% 50% 60% 120%+3.0% for each 1%
Larry 15% 25% 40% 50% 100%+2.4% for each 1%
</TABLE>
Benefits: Same as current FBS executive benefits. -- company paid
family medical insurance, company paid car up to $500 per month
and reasonable expenses.
A-1
<PAGE> 11
EXECUTIVE COMPENSATION PLAN
<TABLE>
<S> <C> <C>
PAUL HARRISON, CHAIRMAN, CEO $200,000 = 1996 BASE SALARY
LARRY FISHER, PRESIDENT $175,000 = 1996 BASE SALARY
EXAMPLE 1: 1996 ACCOMPLISHMENT = 59% OF TARGET 1996 VARIABLE 1996 BASE 1996 TOTAL
- --------- ----------------------------------- ------------- --------- ----------
Paul Harrison 0% of base = $0 $200,000 $200,000
Larry Fisher 0% of base = $0 $175,000 $175,000
1997 Base salary based on 1996 accomplishment
Paul Harrison 1996 base + 10% - 20% = $180,000
Larry Fisher 1996 base + 10% - 20% = $157,500
EXAMPLE 2: 1996 ACCOMPLISHMENT = 80% OF TARGET 1996 VARIABLE 1996 BASE 1996 TOTAL
- --------- ----------------------------------- ------------- --------- ----------
Paul Harrison 30% of base = $60,000 $200,000 $260,000
Larry Fisher 25% of base = $43,750 $175,000 $218,750
1997 Base salary based on 1996 accomplishment
Paul Harrison 1996 base + 10% - 10% = $200,000
Larry Fisher 1996 base + 10% - 10% = $175,000
EXAMPLE 3: 1996 ACCOMPLISHMENT = 100% OF TARGET 1996 VARIABLE 1996 BASE 1996 TOTAL
- --------- ------------------------------------ ------------- --------- ----------
Paul Harrison 50% of base = $100,000 $200,000 $300,000
Larry Fisher 40% of base = $ 70,000 $175,000 $245,000
1997 Base salary based on 1996 accomplishment
Paul Harrison 1996 base + 10% = $220,000
Larry Fisher 1996 base + 10% = $192,500
EXAMPLE 4: 1996 ACCOMPLISHMENT = 200% OF TARGET 1996 VARIABLE 1996 BASE 1996 TOTAL
- --------- ------------------------------------ ------------- --------- ----------
Paul Harrison 120% of base = $240,000 $200,000 $440,000
Larry Fisher 100% of base = $175,000 $175,000 $350,000
1997 Base salary based on 1996 accomplishment
Paul Harrison 1996 base + 10%+50% = $320,000
Larry Fisher 1996 base + 10%+50% = $280,000
</TABLE>
A-2
<PAGE> 1
EXHIBIT 10.19
<PAGE> 2
STOCK PURCHASE AGREEMENT
BETWEEN
FISHER BUSINESS SYSTEMS, INC.
AS BUYER
AND
HALIS, L.L.C.
AS SELLER
AND
PAUL W. HARRISON AND
JAMES ASKEW
AS SIGNIFICANT MEMBERS OF SELLER
FOR THE PURCHASE AND
SALE OF ALL ISSUED AND OUTSTANDING
CAPITAL STOCK OF
HALIS SOFTWARE, INC.
DATED AS OF MARCH 29, 1996
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I SALE OF STOCK
1.1 Sale of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Closing of Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER
2.1 Due Incorporation and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Outstanding Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Options or Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Title To Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Articles of Incorporation and By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.8 Authority of Seller and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.11 Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Title to Properties; Assets Complete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.16 Contracts and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.17 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.18 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.19 Accounts and Notes Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.20 Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.21 Trade Name and Other Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.22 Suppliers and Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.23 Labor Relations; Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.24 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.26 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.27 Officers, Directors and Key Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.28 Restrictive Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.29 Franchises and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.30 Transactions with Affiliated Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.31 Bank Accounts and Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.32 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.33 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.34 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.35 Copies of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III REPRESENTATIONS OF BUYER
3.1 Incorporation and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.2 Articles of Incorporation and By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.3 Authority of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Securities Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.5 Pending Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.6 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
-2-
<PAGE> 4
<TABLE>
<S> <C> <C>
3.7 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.8 Accuracy of SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.9 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IV COVENANTS TO BE PERFORMED PRIOR TO THE CLOSING
4.1 Operation in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Notice of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 Exclusive Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4 Examinations and Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.5 Affiliate Indebtedness Owed to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Affiliate Indebtedness Owed by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE5.1 Representations and Covenants . . . . . 21
5.2 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.3 Net Worth and Cash of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4 Governmental Permits and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.7 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.8 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.9 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.10 Good Standing Certificates, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.11 Non-Compete Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.12 Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.13 Authorization of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.14 Ratification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.15 Closing of AUBIS Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE6.1 Representations and Covenants . . . . . 23
6.2 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Governmental Permits and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Good Standing Certificates, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Authorization of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.7 Ratification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.8 Closing of AUBIS Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII ACTIONS TO BE TAKEN AT THE CLOSING
7.1 Stock Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.3 Opinion of Counsel to the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Opinion of Counsel to the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.5 Resignations of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Closing Certificate of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.7 Closing Certificate of the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.8 Other Documents and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.9 Election of Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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8.2 Seller's and Principals' Indemnity Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Buyer's Indemnity Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 Indemnification Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.5 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.6 Limitations on Liability of Seller and Principals . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX TERMINATION OF AGREEMENT
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE X REPRESENTATIONS AND WARRANTIES OF SELLER IN CONNECTION
WITH OFFER OF BUYER'S STOCK
10.1 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Acquisition for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Unregistered Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.4 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XI REGISTRATION OF SHARES
11.1 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.3 Delay of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.4 Amendment of Section 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XII MISCELLANEOUS
12.1 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.2 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.3 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.5 Brokerage Commissions and Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.7 Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.9 Rights of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.12 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.13 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.16 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
LIST OF SCHEDULES
Schedule 2.1 - Due Incorporation and Qualification
Schedule 2.2 - Outstanding Capital Stock
Schedule 2.6 - Articles of Incorporation and By-Laws
Schedule 2.8 - Consents Required for Seller
Schedule 2.9 - Financial Statements
Schedule 2.11 - Recent Developments
Schedule 2.12 - Litigation
Schedule 2.13 - Taxes
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Schedule 2.15 - Compliance with Laws
Schedule 2.16 - Contracts and Other Agreements
Schedule 2.18 - Leases
Schedule 2.19 - Accounts Receivable
Schedule 2.20 - Fixed Assets
Schedule 2.21 - Trade Names and Other Intangibles
Schedule 2.22 - Suppliers and Customers
Schedule 2.24 - Employee Benefit Plans
Schedule 2.25 - Insurance
Schedule 2.26 - Officers, Directors and Key Employees
Schedule 2.29 - Franchises and Licenses
Schedule 2.30 - Transactions with Affiliated Parties
Schedule 2.31 - Bank Accounts and Powers of Attorney
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of the 29th day of March, 1996, by and
among FISHER BUSINESS SYSTEMS, INC., a Georgia corporation ("Buyer"), HALIS,
L.L.C., a Georgia limited liability company ("Seller"), the owner of all the
issued and outstanding shares of capital stock of HALIS SOFTWARE, INC., a
Georgia corporation (the "Company"), and Paul W. Harrison and Lonnie Herzog,
significant members of Seller (the "Principals").
W I T N E S S E T H :
WHEREAS, the Company is the surviving corporation of a merger effected
on March 7, 1996, between ProHealth Solutions, Inc. ("PSI") and HALIS Software,
Inc. ("HSI"), both Georgia corporations;
WHEREAS, Seller owns all 1,000 shares of common stock, no par value, of
the Company, being all of the issued and outstanding shares of the capital
stock of the Company (the "Stock");
WHEREAS, Seller desires to sell, and Buyer desires to purchase, the
Stock pursuant to this Agreement;
WHEREAS, it is the intention of the parties hereto that upon
consummation of the purchase and sale of the Stock pursuant to this Agreement,
Buyer shall own all of the issued and outstanding shares of capital stock of
the Company; and
WHEREAS, the Principals collectively are the direct or indirect owners
of a controlling membership interest of the Seller and are entering into this
Agreement as joint and several obligors with Seller to induce the Buyer to
purchase the stock from Seller;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree as follows:
ARTICLE I
SALE OF STOCK
1.1 Sale of Stock. Subject to the terms and conditions of this
Agreement, and on the basis of the representations and warranties hereinafter
set forth, at the Closing (as hereinafter defined), Seller agrees to sell,
assign, transfer and deliver the Stock to Buyer, and Buyer agrees to purchase
the Stock from Seller. The certificates representing the Stock shall be duly
endorsed in blank, or accompanied by stock powers duly executed in blank by
Seller, with all necessary transfer tax and other revenue stamps, acquired at
the Seller's expense, affixed and canceled. Seller agrees at any time after
Closing, without further compensation, to cure any deficiencies with respect to
the endorsements of the certificates representing the Stock, or with respect to
the stock power accompanying any such certificates, and to take any other
actions necessary to fully and completely transfer ownership of the Stock to
Buyer free and clear of all liens, encumbrances, equities, restrictions, claims
and obligations.
1.2 Purchase Price. In full consideration for the purchase by
Buyer of the Stock, Buyer shall pay to Seller 5,000,000 shares of the Buyer's
Common Stock, $.01 par value, to be issued to Seller at Closing.
1.3 Closing of Purchase and Sale. The closing of the purchase and
sale provided for herein (the "Closing") shall take place at the offices of
Smith, Gambrell & Russell, Suite 1800, 3343 Peachtree Road, N.E., Atlanta,
Georgia
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30326, beginning at 10:00 A.M. on the first business day which is two
(2) days after the date of Buyer's shareholders shall have ratified the
transactions described herein, or at such other time and place as the parties
shall mutually agree upon (the "Closing Date"), provided the conditions noted
in Articles V, VI and VII have been satisfied or waived prior to such date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, and with the knowledge that Buyer shall
rely thereon, the Seller and Principals, jointly and severally, represent and
warrant to Buyer the following (both as of the Closing Date and as of the date
hereof):
2.1 Due Incorporation and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Georgia, and has the corporate power and lawful authority
to carry on its business as now being conducted, and to own or lease and
operate its properties and assets as now owned, leased or operated by it. The
Company is duly qualified or otherwise authorized as a foreign corporation to
transact business and is in good standing in each jurisdiction set forth on
Schedule 2.1 of the Disclosure Schedule, which are the only jurisdictions in
which such qualification or authorization is required by law. Except as set
forth on Schedule 2.1 of the Disclosure Schedule, the Company does not file and
is not required to file franchise, income or other tax returns in any other
jurisdiction based upon the ownership or use of property therein or the conduct
of business or derivation of income therefrom. The Company does not own or
lease property or maintain any resident employee in any jurisdiction other than
the jurisdictions set forth on Schedule 2.1 of the Disclosure Schedule.
2.2 Outstanding Capital Stock. The title, par value, number of
authorized shares and number of issued and outstanding shares of each class of
capital stock of the Company are set forth on Schedule 2.2 of the Disclosure
Schedule. No other class of capital stock of the Company is authorized or
outstanding. All of the issued and outstanding shares of the Stock are duly
authorized and are validly issued, fully paid and non-assessable.
2.3 Options or Other Rights. There is no outstanding right,
subscription, warrant, conversion right, call, unsatisfied preemptive right,
commitment, option or other agreement or right of any kind pursuant to which
any person or entity has the right or option to purchase or otherwise to
receive from the Company or Seller any shares of the Stock or any shares of the
capital stock or any other security of the Company and there is no outstanding
security of any kind convertible into or redeemable or exchangeable for any
shares of the capital stock or any other security of the Company. There is no
shareholders' agreement, voting trust or similar agreement or arrangement to
which the Company or Seller is a party which affects or restricts in any way
the Seller's rights and obligations with respect to the Stock.
2.4 Title To Stock. The Seller beneficially and of record owns,
and has full power and authority to convey free and clear of all liens,
encumbrances, equities, restrictions, claims and obligations of every kind, all
of the shares of Stock and, upon delivery of and payment for such Stock as
herein provided, Buyer will acquire good and marketable title thereto, free and
clear of all liens, encumbrances, equities, restrictions, claims and
obligations of every kind.
2.5 Subsidiaries and Investments. The Company has no subsidiaries
and does not own, directly or indirectly, any capital stock or other equity or
ownership or proprietary interest in, or have any investment in, any other
corporation, partnership, association, trust, joint venture or other entity.
2.6 Articles of Incorporation and By-Laws. Schedule 2.6 of the
Disclosure Schedule contains true and complete copies of the Articles of
Incorporation of the Company, including all amendments thereto (certified by
the Secretary of State of its jurisdiction of incorporation), and By-laws of
the Company, including all amendments thereto (certified by its corporate
secretary), as in effect on the date hereof, and such By-Laws and Articles of
Incorporation will not be amended, rescinded or otherwise modified between the
date hereof and the Closing Date.
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2.7 Books and Records. The corporate minute books, stock
certificate books, stock registers and other corporate records of the Company
are true, correct and complete in all material respects, and the signatures
appearing on all documents contained therein are the true signatures of the
persons purporting to have signed the same. The corporate minute books of the
Company contain true and complete records of all meetings, and consents in lieu
of meetings, of the Board of Directors and Stockholders of the Company since
its incorporation. All actions reflected in said books and records were duly
and validly taken in compliance with the laws of the state of incorporation of
the Company. None of the Company's records, systems, controls, data or
information are recorded, stored, maintained or operated by, or otherwise are
wholly or partly dependent upon or held by, any person or entity or media
(including any electronic, mechanical or photographic process) which are not
under the exclusive ownership and direct control of the Company including all
means of access.
2.8 Authority of Seller and the Company. The Seller and each
Principal has full power and legal capacity to execute and deliver this
Agreement and the other agreements required to be executed and delivered by
such Seller or such Principal hereunder (this Agreement and such other
agreements being herein called the "Seller Documents") and to carry out the
transactions contemplated hereby. The Seller Documents are valid and binding
agreements of Seller and each Principal enforceable against Seller and such
Principal in accordance with their respective terms. Except as described in
Schedule 2.8 of the Disclosure Schedule, no consent, authorization or approval
of, or declaration, filing or registration with, any governmental or regulatory
authority, or any consent, authorization or approval of any other third party,
is necessary in order to enable Seller or either Principal to enter into and
perform such Seller's or Principal's obligations under the Seller Documents,
and neither the execution and delivery of the Seller Documents nor the
consummation of the transactions contemplated thereby will:
(i) conflict with, require any consent under, result in
the violation of, or constitute a breach of any provision of the Articles of
Incorporation or By-Laws of the Company or the Operating Agreement or other
constitutional documents of Seller;
(ii) conflict with, require any consent under, result in
the violation of, constitute a breach of, or accelerate the performance
required on the part of the Seller, either Principal or the Company by the
terms of, any evidence of indebtedness or agreement to which the Company, the
Seller or any Principal is a party, in each case with or without notice or
lapse of time or both, including any mortgage or deed of trust or other
agreement creating a lien, charge or encumbrance to which any property of the
Company or the Stock is subject, or permit the termination of any such
agreement by another person;
(iii) result in the creation or imposition of any security
interest, lien, charge or other encumbrance upon, or restriction on the use of,
any property or assets of the Company or the Stock under any agreement or
commitment to which the Company or Seller is bound;
(iv) accelerate, or constitute an event entitling, or
which would, on notice or lapse of time or both, entitle the holder of any
indebtedness of the Company or the Seller to accelerate the maturity of any
such indebtedness;
(v) conflict with or result in the breach or violation of
any writ, judgment, order, injunction, decree or award of any court or
governmental body or agency or arbitration tribunal that is binding on the
Company or the Seller;
(vi) constitute a violation by the Company or the Seller
of any statute, law or regulation of any jurisdiction; or
(vii) violate or cause any revocation of or limitation on
any Permit (as defined in Section 2.29 hereof).
2.9 Financial Statements. Seller and the Company have heretofore
furnished Buyer with (i) true and complete copies of the combined balance
sheets and related statements of income and stockholders equity and statement
of cash flow of PSI and HSI for the fiscal year ended on December 31, 1995,
together with the accompanying notes
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thereto and the reports thereon, audited by the Company's certified public
accountants, Habif, Arogeti and Wynne, P.C.; and (ii) unaudited balance sheets
of the Company as of January 31, 1996 (the "Balance Sheet Date") and the
related unaudited statements of income and retained earnings for the Company
for the period then ended (hereinafter, the financial statements referred to in
subsections (i) and (ii), together with the footnotes and supporting schedules
thereto, are referred to as the "Financial Statements"). Copies of such
Financial Statements have been attached as Schedule 2.9 of the Disclosure
Schedule. Such Financial Statements, including the footnotes thereto, have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated. The Financial Statements
fairly present the financial condition of the Company at the dates thereof and,
except as indicated therein, to the knowledge of Seller or the Principals
reflect all claims against, and all debts and liabilities of, the Company,
fixed or contingent, as at the dates thereof, and the related statements of
income and shareholders equity and changes in cash flow, fairly present the
results of the operations of the Company and the changes in its financial
position for the periods indicated.
2.10 No Undisclosed Liabilities. Except as reflected and reserved
against in the Financial Statements, to the knowledge of Seller or the
Principals as of the Balance Sheet Date the Company did not have any
liabilities or obligations (whether long term or current and whether accrued,
absolute or contingent) and, except for liabilities and obligations incurred
since the Balance Sheet Date in the ordinary course of business and disclosed
to Buyer in writing as of the Closing Date, to the knowledge of Seller or the
Principals the Company will not have any liabilities or obligations (whether
long term or current and whether accrued, absolute or contingent) which,
individually or in the aggregate, are material.
2.11 Recent Developments. Except as described on Schedule 2.11
annexed hereto, since the Balance Sheet Date there has not been, and to the
knowledge of Seller or the Principals no fact or condition exists, which might
reasonably be expected to cause (i) any adverse change in the assets or
liabilities, business, results of operations, condition (financial or
otherwise) or prospects of the Company, other than immaterial changes in the
ordinary course of business, (ii) any notice of termination of any material
agreement given by a third party to the Company or any relinquishment by the
Company of any rights of material value, or any material adverse change in the
relations of the Company with its key employees, lessors, customers, suppliers,
or others having business relations with the Company, (iii) any claim against
the Company for, or any liability incurred by the Company in respect of, any
damages or alleged damages for any actual or alleged negligence or other tort,
breach of contract or violation of property rights in excess of $10,000, or
(iv) any capital expenditure or commitment therefor by the Company in excess of
$10,000, (v) any indebtedness incurred by the Company for borrowed money which
would result in the Company being indebted at the Closing Date in an amount
exceeding its indebtedness for borrowed money on the Balance Sheet Date or any
commitment of the Company to borrow or lend money, (vi) any increase in the
compensation paid or payable, to any of the Company's employees other than
normal merit increases consistent with past Company practice which do not
exceed 5% of the applicable employee's previous compensation, (vii) any change
in the Company's accounting methods, principles, or practices, (viii) any
change in the capital stock of the Company or any dividend paid or declared
with respect to such capital stock, or (ix) any other event or circumstance
which has materially and adversely affected the business of the Company or the
operation thereof.
2.12 Litigation. Except as described in Schedule 2.12 of the
Disclosure Schedule, there is no action, suit, proceeding at law or in equity
by any person or entity, or any arbitration, or any administrative or other
proceeding by or before any governmental or other instrumentality or agency,
pending, or, to the knowledge of Seller or the Principals, threatened, against
or affecting the Company or any of its properties, assets or rights which could
adversely affect the right or ability of the Company to carry on its business
as now conducted, or which could adversely affect the condition, financial or
otherwise, or properties of the Company, and neither the Seller nor the
Principals know of any valid basis for any such action, proceeding or
investigation. The Company is not subject to any judgment, order, award or
decree entered in any lawsuit or proceeding which may have an adverse effect on
any of its operations, business practices or on its ability to acquire any
property or conduct business in any area.
2.13 Taxes. The Company has filed or caused to be filed, within the
times and in the manner prescribed by law, all federal, state, local, foreign
and other income, estimated, import, sales, use, license, franchise, gross
receipts, excise, real and personal property, employment and payroll-related,
and other tax returns and tax reports ("Tax Returns")
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which are required to be filed by, or with respect to, the business and assets
of the Company. Such Tax Returns are true, correct and complete, reflect
accurately all liability for taxes of the Company for the periods covered
thereby and all amounts shown as owing thereon or otherwise due from or payable
by the Company have been fully paid or adequately disclosed and fully provided
for by adequate reserves on the books and on the Financial Statements of the
Company and as of the Closing Date all Tax Returns required to be filed by the
Company prior to such date will have been filed and all amounts shown as owing
thereon will have been paid or disclosed to Buyer in writing. Except as
described in Schedule 2.13 of the Disclosure Schedule, there has been no prior
examination of any Tax Return of the Company and no such examination or
investigation is in progress, and the Company has no knowledge or any events or
circumstances which could lead to an examination or investigation of any Tax
Return. Except as described on Schedule 2.13, there are no outstanding
agreements or waivers in effect with respect to any Tax Returns including any
agreements or waivers extending the statutory period of limitation applicable to
any Tax Return or permitting the deferral of the assessment or payment of any
taxes now due to be paid or assessed to any future period.
2.14 Title to Properties; Assets Complete. The Company has good,
valid and marketable title to all of its material properties and assets
(tangible and intangible), including without limitation, all properties and
assets shown on the Financial Statements as of the Balance Sheet Date and all
properties and assets purchased or acquired by the Company since the Balance
Sheet Date; in each case subject to no encumbrance, lien, charge or other
restriction of any kind, except for (i) liens reflected on the Financial
Statements (ii) liens for current taxes, assessments or governmental charges or
levies on property not yet due or delinquent and (iii) liens described on
Schedule 2.14 of the Disclosure Schedule (liens of the type described in (i),
(ii) and (iii) above being sometimes described as "Permitted Liens"). Except
for software licenses described in Schedule 2.16 of the Disclosure Schedule, or
leases or real and personal property described in Schedules 2.16 and 2.18 of
the Disclosure Schedule, the Company owns outright, and is in exclusive
possession of, all assets, properties or rights currently used in the business
of the Company.
2.15 Compliance with Laws. The Company is not in violation of any
applicable order, judgment, injunction, award or decree of any court or
governmental or regulatory body or agency, or arbitration tribunal. Except as
described on Schedule 2.15 of the Disclosure Schedule, the Company is not in
violation of any federal, state, local or foreign law, ordinance, rule,
directive, or regulation, or any other requirement of any governmental or
regulatory body or agency, court or arbitrator applicable to the business of
the Company. Without limiting the generality of the foregoing, except as
described on Schedule 2.15 of the Disclosure Schedule, (i) there is not
pending, or to the knowledge of the Sellers or the Principals threatened, any
notification of any governmental or regulatory body, agency or authority that
the Company is not in compliance with applicable laws and regulations
respecting employment and employment practices, occupational safety and health
laws and regulations, and laws or regulations relating to the quality of the
environment neither the Seller nor the Principals know of any basis therefor,
and (ii) the Company has not received any such notification of past violations
of such laws or regulations that can reasonably be expected to result in future
claims against the Company, and neither the Sellers nor the Principals know of
any basis therefor.
2.16 Contracts and Other Agreements. Schedule 2.16 of the
Disclosure Schedule contains a complete and accurate list of all of the
following contracts and other agreements to which the Company is a party or by
or to which it or its assets or properties are bound or subject or which are
necessary for the Company to conduct its business as presently conducted:
(i) contracts and other agreements with any current or former officer,
director, employee, consultant, agent or other representative or with
any person or entity in which any of the foregoing has an interest,
including any "Affiliate" or "Associate" of such person or entity, as
such terms are defined in the Securities Act of 1933 and the rules and
regulations published thereunder;
(ii) contracts and other agreements with any labor union or association
representing any employee;
(iii) contracts and other agreements for the supply to any person of all or
a portion of such person's requirements of any product or service sold
by the Company;
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<PAGE> 12
(iv) contracts and other agreements for the sale of any of its assets or
properties other than in the ordinary course of business or for the
grant to any person of any preferential rights to purchase any of its
assets or properties;
(v) joint venture and partnership agreements;
(vi) contracts or other agreements under which the Company agrees to
indemnify any party or to share tax liability of any party;
(vii) contracts or other agreements of guaranty or relating to matters of
suretyship to which the Company is a party or by which its assets or
properties are subject or bound,
(viii) contracts and other agreements calling for an aggregate price or fee,
or payments in any one year, of more than $10,000 excluding purchase
or sales orders entered into by the Company as a purchaser or a seller
in the ordinary course of business;
(ix) contracts and other agreements that cannot be cancelled without
liability, premium or penalty upon thirty (30) days' notice;
(x) contracts and other agreements with customers or suppliers for the
sharing of fees, the rebating of charges or other similar
arrangements;
(xi) contracts and other agreements containing obligations or liabilities
of any kind to holders of the Company's securities as such (including,
without limitation, an obligation to register any of such securities
under any federal or state securities laws);
(xii) contracts and other agreements containing covenants of the Company not
to compete in any line of business or with any person in any
geographical area or covenants of any other person or entity not to
compete with the Company in any line of business or in any
geographical area;
(xiii) contracts and other agreements relating to the acquisition by the
Company of any operating business or the capital stock of any other
person, corporation or other entity;
(xiv) contracts or agreements relating to or affecting any trade name,
trademark, service mark, patent rights, copyright, know-how, software
or other intellectual property owned, licensed or used by the Company
in the course of its business, including without limitation all
contracts and agreements relating to the development and use of
software;
(xv) contracts and other agreements requiring the payment to any person of
a royalty, override or similar commission or fee;
(xvi) contracts and other agreements relating to the borrowing of money by
the Company or subjecting any assets or properties of the Company to
security interests, liens or other liabilities or obligations;
(xvii) any agreement, contract or commitment which might reasonably be
expected to have a potential adverse impact on the business or
operations of the Company;
(xviii) any contract or other agreement not made in the ordinary course of
business; or
(xix) any other material contract or other agreement whether or not made in
the ordinary course of business.
There have been delivered or made available to the Buyer true and complete
copies of all of the written contracts and other agreements described on
Schedule 2.16. All of such contracts and other agreements are valid and binding
upon the Company in accordance with their terms, and the Company has performed
in all respects all contractual obligations
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<PAGE> 13
required to be performed by it to date and is not in default under any such
contracts and has not taken any action which constitutes or with notice or lapse
of time or both would constitute a default under such contracts. To the
knowledge of the Seller, and the Principals, no other party to any such contract
is in default in the performance of its obligations thereunder or has taken any
action which constitutes, or with notice or lapse of time or both would
constitute, a breach or anticipatory breach thereof. Except as separately
identified on Schedule 2.16, no approval or consent of any person is needed in
order that the contracts and other agreements set forth on Schedule 2.16 or on
any other Schedule continue in full force and effect following the consummation
of the transactions contemplated by this Agreement. As used in this Agreement,
the term "contract" or "agreement" includes any written or oral agreement,
commitment, understanding or arrangement to which the Company is a party with
respect to the business of the Company or by which the Company's assets are
bound.
2.17 Software. Schedule 2.17 of the Disclosure Schedule contains a
complete list of all computer software which is material to the Company's
business and which has been designed specifically for use by the Company or as
to which the Company claims any proprietary rights (the "Software"). Schedule
2.17 lists all employees and independent contractors who participated
materially in the creation or material modification of the Software. Except as
described in Schedule 2.17, the Company is the exclusive owner of all patents,
copyrights, trademarks, intellectual property rights, trade secrets and other
proprietary information, processes, and formulae used in connection with the
Software. All work performed by employees, independent contractors or others in
connection with the Software on behalf of the Company has been either (i)
pursuant to a "work-for-hire" arrangement or agreement with the Company in
accordance with applicable state and federal law, that has accorded the Company
full, effective, exclusive and original ownership of all tangible and
intangible property arising thereby or (ii) subject to an executed instrument
of assignment in favor of the Company that has conveyed to the Company full,
effective and exclusive ownership of all tangible and intangible property
arising in connection with the work performed. Except as described in Schedule
2.17, the Company has exclusive ownership, possession and control of all source
codes, system documentation, statements of principles of operation, and
schematics for all the Software that may be necessary to render such materials
understandable and usable by a trained computer programmer. Except as described
in Schedule 2.17, the Company has taken adequate measures consistent with
industry practice to safeguard the confidentiality of any confidential
information or trade secrets relating to the Software.
2.18 Leases. Schedule 2.18 of the Disclosure Schedule contains a
complete and accurate list of any real property lease binding the Company or to
which the Company is a party. Each such lease is in full force and effect, and
the Company has fully performed in all material respects all obligations on its
part to be performed to date under said leases. The Company is current with
respect to the payment of all rents and other charges due thereunder and its
use and occupancy of the premises which are the subject matter of such leases
does not violate any of the terms of such leases, is in conformity with all
applicable building, zoning, health, fire, safety and other laws, ordinances,
codes and regulations and is not violative of the conditions of any of the
Company's policies of insurance. All of the buildings, structures and
appurtenances situated on such leased premises are, and as of the Closing Date,
will be, in good operating condition and state of maintenance and repair and
will be adequate and suitable for the purposes for which they are presently
being or are intended to be used, and the Company has adequate rights of
ingress and egress and utility services for the operation of the Company's
business in the ordinary course. No lessor or landlord under any lease is in
default in the performance of its obligations thereunder and the Company has
not received notice from any such lessor or landlord of its intention to
exercise any option thereunder which would adversely affect or terminate the
Company's use or occupancy of the demised premises under such lease. Except as
specifically disclosed in Schedule 2.18, all of the leases permit the
consummation of the transactions contemplated hereby without modification of
the terms thereof and without the consent of the applicable lessor or landlord.
The Company does not own any real property and has never owned any real
property.
2.19 Accounts and Notes Receivable. All accounts and notes
receivable reflected on the Financial Statements, and all accounts and notes
ordinary course of business of the Company, represent valid obligations due to
the Company. To the knowledge of Seller and Principals, none of such notes and
accounts receivable or other debts is or will at the Closing Date be subject to
any counterclaim or set-off, or is or at the Closing will be subject to any
lien, claim, encumbrance, charge or restriction
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<PAGE> 14
whatsoever. There has been no material change since the Balance Sheet Date in
the amount of accounts receivable or other debts due the Company or the reserves
for bad debts relating thereto from that reflected in the Financial Statements.
2.20 Fixed Assets. Schedule 2.20 of the Disclosure Schedule
contains a complete and accurate list of all machinery, equipment, tools,
furniture, leasehold improvements, trade fixtures, vehicles, structures, or any
related capitalized items and other tangible property material to the operation
of the business of the Company (the "Fixed Assets") and all such Fixed Assets
are reflected in the Financial Statements (except any such tangible property
acquired since the Balance Sheet Date by the Company). Since the Balance Sheet
Date the Company has not disposed of any Fixed Assets except in the ordinary
course of the Company's business. The Fixed Assets are in good operating
condition and repair, subject to normal wear and tear from normal use thereof,
and the Company has not received notice that any of the Fixed Assets or the
Company's use thereof is in violation of any existing law or any building,
zoning, health, fire, safety or other ordinance, code or regulation.
2.21 Trade Name and Other Intangibles. Schedule 2.21 of the
Disclosure Schedule contains a complete and accurate list of all patents,
patent rights, licenses, methodologies, know-how, trademarks, trademark rights,
trade names, trade name rights, service marks, service mark rights, copyrights
or similar rights ("Intellectual Property") which are either (i) wholly or
partly owned or licensed by the Company, or (ii) used in the conduct of the
business of the Company. Except as described on Schedule 2.21 of the Disclosure
Schedule, no person or entity, other than the Company, has any rights under or
in respect of, and to the knowledge of the Sellers and the Company, no person
is infringing or otherwise acting adversely with respect to, the Company's
rights under or in respect of the Intellectual Property, and the Company is the
exclusive owner of such rights and there is no claim for damages or any
proceeding pending or to the knowledge of Seller or the Principals threatened,
with respect thereto. The Company is not infringing or otherwise acting
adversely to the right of any person under or in respect to Intellectual
Property, and there is no claim for damages or any proceeding pending, or to
the knowledge of Seller or the Principals threatened, with respect thereto.
2.22 Suppliers and Customers. Schedule 2.22 of the Disclosure
Schedule contains a complete and accurate list of (i) any licensor or supplier
from whom the Company purchased or to which the Company paid $15,000 or more
during the last fiscal year of the Company and the amount paid by the Company
to such suppliers, and (ii) any customer or client which purchased during the
last fiscal year of the Company $10,000 or more in services from the Company.
The Company enjoys good relations with all customers listed on Schedule 2.22,
and no customer listed on Schedule 2.22 has notified the Company or the Sellers
of such customer's intention to terminate or materially reduce use of the
Company's services, and neither the Seller or principals have any reason to
believe any such customer is likely to terminate the services of the Company on
account of the transactions contemplated hereunder.
2.23 Labor Relations; Employees. Other than amounts which have not
yet become payable in accordance with the Company's customary practices, which
will be paid in a timely manner, (a) the Company has paid in full to its full
and part-time employees all wages, salaries, commissions, bonuses and other
direct compensation for all services performed by them to date, and (b) the
Company has paid, or will pay in a timely manner, all severance pay, if any,
and benefits, FICA, withholding taxes and vacation pay, if any, for all of its
employees and is not subject to any claim for non- payment or non-performance
of any of the foregoing. The Company is in compliance with all federal, state
and local laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours. The Company has not
improperly characterized as an independent contractor or consultant, any
individual who should have been treated as an employee of the Company for tax
withholding or any other purpose. There is no unfair labor practice complaint
against the Company pending before the National Labor Relations Board or any
comparable state or local agency. There is no labor strike, dispute, slowdown
or stoppage pending, or to the knowledge of the Seller or the Principals,
threatened, against or involving the Company. No grievance which might have an
adverse effect on the Company or the conduct of its business or proceeding
alleging discriminatory practices or sexual harassment is pending and no claim
therefor has been asserted. No collective bargaining representative is
certified to represent any group of employees of the Company under the
Labor-Management Relations Act of 1947; no petition for election of a
collective bargaining representative for all or any portion of the business of
the Company is pending or in respect of any other group of employees; neither
the Seller nor the Principals are aware of any organizational effort or
campaign by any labor union that affects or might affect employment of any
employee of the Company; and the Company is not a party to any collective
bargaining agreement with respect to any of its employees.
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2.24 Employee Benefit Plans. Except as described on Schedule 2.24
of the Disclosure Schedule, the Company is neither a party to, nor makes or is
required to make employer contributions to, nor has any current or future
obligation or liability with respect to, any pension, profit sharing,
retirement, deferred compensation, bonus, stock purchase, severance,
hospitalization, medical insurance, life insurance, vacation policy or other
employee benefit plan or program providing benefits for its current or former
employees, other than salaries or cash wages for straight time, overtime or
shift differential (a "Plan"). Except as described on Schedule 2.24, the
Company has complied with all of its obligations under each Plan and, to the
knowledge of the Seller and the Principals, all other parties have complied
with all of their respective obligations under each Plan. The Company has made
or provided for all payments due under or with respect to each Plan up to and
including the Closing Date, and all amounts properly accrued up to and
including the Closing Date as liabilities of the Company under each Plan have
been recorded on the books of the Company. Except as described on Schedule
2.24, no Plan is a "multiemployer plan" (within the meaning of section 3(37) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and
except as so set forth, the Company has not made, or has been required to make,
any contributions to any "multiemployer plan" within the last five (5) years.
Except as described on Schedule 2.24, no Plan listed on Schedule 2.24 (other
than any "multiemployer plan") is subject to Title IV of ERISA.
Each Plan listed on Schedule 2.24 has received a determination letter
from the Internal Revenue Service to the effect that it qualified under section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
each trust established under such Plan is exempt from taxation under section
501(a) of the Code, and nothing has occurred which would cause the loss of such
qualifications or exemptions. No "reportable event" (within the meaning of
section 4043(b) of ERISA) has occurred with respect to any pension plan that is
subject to Title IV of ERISA maintained by any trade or business (whether or
not incorporated) that is under common control with the Company, within the
meaning of section 414(c) of the Code and the regulations thereunder
(hereinafter any such plan shall be referred to as an "Affiliate Plan" and any
such trade or business shall be referred to as an "ERISA Affiliate"), and no
"reportable event" will occur with respect to any Plan or Affiliate Plan as a
result of any transaction contemplated by this Agreement.
The Company would not be subject to any withdrawal liability with
respect to any "multiemployer plan" listed on Schedule 2.24 if the Company were
to withdraw from any such plan as of the date hereof. Except as described on
Schedule 2.24, the Company has satisfied all material reporting and disclosure
requirements and all other requirements applicable to it under the Code or
ERISA, and the Department of Labor and the Internal Revenue Service regulations
promulgated thereunder, with respect to the Plans. Neither the Company, nor, to
the knowledge of the Company, Seller and the Principals, any other "party in
interest" or "disqualified person" (within the meaning of section 3(14) of
ERISA or section 4975(e)(2) of the Code, respectively) with respect to any Plan
has engaged in any "prohibited transaction" (within the meaning of section 406
of ERISA or section 4975 of the Code) which could subject any Plan, the Buyer,
the Company or any trustee, administrator or other fiduciary of any Plan, to
any penalty or excise tax imposed on prohibited transactions by section 502(i)
of ERISA or section 4975 of the Code. There are no material actions, suits or
claims pending (other than routine claims for benefits) or, except as described
on Schedule 2.24, to the knowledge of the Seller or the Principals, threatened,
against any Plan or against the assets of any Plan. No Plan which is subject to
Part III of Subtitle B of Title I of ERISA or section 412 of the Code has
incurred any "accumulated funding deficiency" (as defined in ERISA), whether or
not waived. Except as described on Schedule 2.24, no Plan or Affiliate Plan
that is or was subject to Title IV of ERISA has been terminated and, to the
knowledge of the Seller and the Principals, no proceeding has been initiated to
terminate any such Plan or Affiliate Plan. None of the Company, any ERISA
Affiliates, or the Seller have incurred, nor reasonably expects to incur as a
result of any event occurring on or prior to the Closing Date, any liability to
the Pension Benefit Guaranty Corporation (except for required premium payments,
none of which payments are overdue) or any withdrawal liability under Title IV
of ERISA.
With respect to each Plan that is an "employee benefit plan," within the
meaning of Section 3(3) of ERISA, true and complete copies of (i) the documents
embodying the Plan, any related trust and all amendments thereto, (ii) the
summary plan description and all modifications thereto, (iii) the last filed
Annual Report (Form 5500 Series) and Schedules A and B thereto, (iv) the most
recent Internal Revenue Service determination letter, if applicable, (v) the
most recent actuarial valuation report, if any, and (vi) the most recent annual
and periodic financial statements, have been delivered or made available to the
Buyer and are correct in all material respects.
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2.25 Insurance. Schedule 2.25 of the Disclosure Schedule contains a
list and brief description (specifying the insurer, the policy number or
covering note number with respect to binders and the amount of any deductible,
describing each pending claim thereunder of more than $10,000, setting forth
the aggregate amounts paid out under each such policy through the date hereof
and the aggregate limit, if any, of the insurer's liability thereunder) of all
policies or binders of fire, liability, product liability, workmen's
compensation, vehicular, unemployment and other insurance held by or on behalf
of the Company. Such policies and binders are valid and enforceable in
accordance with their terms, are in full force and effect, and insure against
risks and liabilities to the extent and in the manner reasonably determined by
the Company to be appropriate and sufficient and are adequate to protect the
Company and its assets and properties. The Company has paid all premiums due
thereon and is not in default with respect to any provision contained in any
such policy or binder and has not failed to give any notice or present any
claim under any such policy or binder in due and timely fashion. Except for
claims described on Schedule 2.25, there are no outstanding unpaid claims under
any such policy or binder. The Company has received no notice of cancellation
or non-renewal of any such policy or binder. None of the policies listed on
Schedule 2.25 provides that premiums paid in respect of the periods prior to
the Closing Date may be adjusted or recomputed based on claims-paying
experience of such policies or otherwise. The Company has received no notice
from any of its insurance carriers that any insurance premiums will be
increased in the future or that any insurance coverage listed on Schedule 2.25
will not be available in the future on the same terms as now in effect.
2.26 Environmental Matters.
(a) Except as described in Schedule 2.26 of the
Disclosure Schedule, (i) the Company has never generated, transported, used,
stored, treated, disposed of, or managed any Hazardous Waste (as defined
below); (ii) to the knowledge of Seller and Principals, no Hazardous Material
(as defined below) has ever been or is threatened to be spilled, released, or
disposed of at any site presently or formerly owned, operated, leased or used
by the Company, or has ever come to be located in the soil or groundwater at
any such site; (iii) no Hazardous Material has ever been transported by or at
the direction of the Company from any site presently or formerly owned,
operated, leased, or used by the Company for treatment, storage, or disposal at
any other place; to the knowledge of Seller and Principals, the Company does
not presently own, operate, lease, or use, nor has it previously owned,
operated, leased, or used any site on which underground storage tanks are or
were located; and (iv) to the knowledge of Seller and Principals, no lien has
ever been imposed by any governmental agency on any property, facility,
machinery, or equipment owned, operated, leased, or used by the Company in
connection with the presence of any Hazardous Material.
(b) The Company has no liability under, nor has it ever
violated, any Environmental Law (as defined below); to the knowledge of Seller
and the Principals, the Company, any property owned, operated, leased, or used
by the Company, and any facilities and operations thereon are presently in
compliance with all applicable Environmental Laws; the Company has never
entered into or has been subject to any judgment, consent decree, compliance
order, or administrative order with respect to any environmental or health and
safety matter or received any request for information, notice, demand letter,
administrative inquiry, or formal or informal complaint or claim with respect
to any environmental or health and safety matter or the enforcement of any
Environmental Law; and nether the Seller nor the Principals has knowledge or
reason to know that any of the items enumerated in the immediately preceding
clause of this paragraph will be forthcoming.
(c) Except as described in Schedule 2.26, to the
knowledge of Seller and Principals, no site currently owned, operated, leased,
or used by the Company contains any asbestos or asbestos-containing material,
any polychlorinated biphenyls (PCBs) or equipment containing PCBs, any
underground storage tanks, or any urea formaldehyde foam insulation.
(d) The Company has provided to Buyer copies of all
documents, records, and information available to the Company concerning any
environmental or health and safety matter relevant to the Company, whether
generated by the Company or others, including, without limitation,
environmental audits, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans, and reports, correspondence, permits, licenses, approvals, consents, and
other authorizations related to environmental or health and safety matters
issued by any governmental agency.
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<PAGE> 17
(e) For purposes of this Agreement, (i) "Hazardous
Material" shall mean and include any hazardous waste, hazardous material,
hazardous substance, petroleum product, oil, toxic substance, pollutant,
contaminant, or other substance which may pose a threat to the environment or
to human health or safety, as defined or regulated under any Environmental Law;
(ii) "Hazardous Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii) "Environmental Law" shall mean any
environmental or health and safety-related law, regulation, rule, ordinance, or
by-law at the foreign, federal, state, or local level, whether existing as of
the date hereof, previously enforced, or subsequently enacted, and (iv) "the
Company" shall mean and include the Company and all other entities for whose
conduct the Company is or may be held responsible under any Environmental Law.
2.27 Officers, Directors and Key Employees. Schedule 2.27 of the
Disclosure Schedule describes the name and total annual compensation (and
benefit costs) from the Company of each officer and director of the Company and
of each other employee, consultant, agent or other representative of the
Company whose current annual rate of compensation exceeds $25,000. The Company
has not made a commitment or agreement to increase the compensation or to
modify the conditions or terms of employment of any such person. None of such
persons has communicated to the Company or to any of its officers or directors
that such person intends to cancel or otherwise terminate such person's
relationship with the Company as a result of the consummation of the
transactions contemplated hereby.
2.28 Restrictive Documents. Neither the Company nor the Seller is
subject to, or a party to, any charter, by-law, mortgage, lien, lease, license,
permit, agreement, contract, instrument, law, rule, ordinance, regulation,
order, judgment or decree, or any other restriction of any kind, which
adversely affects the business practices, operations or condition of the
Company or any of its assets or property, or which would prevent consummation
of the transactions contemplated by this Agreement, compliance by the Seller
with the terms, conditions and provisions hereof, or the continued operation of
the Company's business after the date hereof or the Closing Date on
substantially the same basis as heretofore operated or which would restrict the
ability of the Company to acquire any property or conduct business in any area.
2.29 Franchises and Licenses. The Company possesses all franchises,
concessions, permits, licenses, orders, and other governmental authorizations
and approvals ("Permits") required to permit the Company to carry on its
business as it is presently being conducted. All such Permits described on
Schedule 2.29 of the Disclosure Schedule, are in the name of the Company and
are in full force and effect, and no modification, termination, suspension or
cancellation of any of them is threatened. Except as described in Schedule 2.29
all such Permits permit the consummation of the transactions contemplated
hereby without modification thereof and without the consent of the issuing
authority.
2.30 Transactions with Affiliated Parties. Except as described on
Schedule 2.30 of the Disclosure Schedule no Affiliate of the Company or any
Seller or Principal (i) has any ownership interest, directly or indirectly, in
any competitor, supplier or customer of the Company, (ii) has any outstanding
loan to or receivable in either event to or from the Company, or (iii) is a
party to or has any interest in any contract or agreement with the Company.
2.31 Bank Accounts and Powers of Attorney. Schedule 2.31 of the
Disclosure Schedule contains an accurate and complete list showing (i) the name
and address of each bank in which the Company has an account or safe
deposit box, the number of any such account or any such box and the names of
all persons authorized to draw thereon or to have access thereto, and (ii) the
names of all persons, if any, holding powers of attorney from the Company and a
summary statement of the terms thereof.
2.32 Absence of Changes. Since the Balance Sheet Date, except as
expressly contemplated hereby or disclosed in Schedule 2.32 of the Disclosure
Schedule, the Company has not (i) incurred any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), except in the
ordinary course of business, (ii) permitted any of its assets to be subjected
to any mortgage, pledge, lien, security interest, encumbrance, restriction or
charge of any kind, (iii) sold, transferred or otherwise disposed of any assets
except product inventory sold in the ordinary course of business, (iv) made any
capital expenditure or commitment therefor, (v) declared or paid any dividend
or made any distribution on any shares of its capital stock, or redeemed,
purchased or otherwise acquired any shares of its capital
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<PAGE> 18
stock or granted or cancelled any option, warrant or other right to purchase or
acquire any such shares, (vi) made any bonus or profit sharing distribution or
similar payment of any kind, (vii) increased its indebtedness for borrowed
money, or made any loan to any person, (viii) except in the ordinary course of
business, consistent with past practices of the Company, made or permitted any
amendment or termination of any contract, agreement or license to which the
Company is a party or by which it or any of its assets and properties are
subject or bound, (ix) entered into any agreement or arrangement granting any
preferential rights to purchase any of the Company's assets or properties or
requiring the consent of any party to the transfer and assignment of any of the
Company's assets or properties, (x) written off as uncollectible any notes or
accounts receivable, except write-offs in the ordinary course of business
charged to applicable reserves, none of which individually or in the aggregate
is material to the Company, (xi) granted any increase in the rate of wages,
salaries, bonuses or other remuneration of any executive employee or other
employees, except in the ordinary course of business, (xii) cancelled or waived
any claims or rights of substantial value, (xiii) made any change in any method
of accounting or auditing practice, (xiv) otherwise conducted its business or
entered into any transaction, except in the usual and ordinary manner and in the
ordinary course of its business, or (xv) agreed, whether or not in writing, to
do any of the foregoing.
2.33 Disclosure. Neither this Agreement, nor any Schedule, Exhibit
or certificate delivered in accordance with the terms hereof by or on behalf of
the Seller or the Principals, or by any of the Company's directors or officers,
in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit any
statement of a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to the
Seller or the Principals which materially and adversely affects the business,
prospects (financial or otherwise) or financial condition of the Company or its
respective properties or assets, which has not been set forth in this Agreement
or in the Schedules or Exhibits or certificates furnished in connection with
the transactions contemplated by this Agreement. Notwithstanding the foregoing,
Seller and Principals may update the Disclosure Schedule prior to Closing in
accordance with Section 4.2 hereof.
2.34 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Sellers or the Company is, or will be, entitled to any
commission or broker's or finder's fees from any of the parties hereto, or from
any person controlling, controlled by or under common control with any of the
parties hereto, in connection with any of the transactions contemplated herein.
2.35 Copies of Documents. The Seller and/or the Principals have
caused to be made available for inspection and copying by Buyer and its
advisors, true, complete and correct copies of all documents referred to in
this Article II or in any Schedule furnished by the Seller to the Buyer.
ARTICLE III
REPRESENTATIONS OF BUYER
3.1 Incorporation and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia, and has the corporate power and lawful authority to carry on its
business as now being conducted, and to own, lease and operate its properties
and assets as now owned, leased or operated by it.
3.2 Articles of Incorporation and By-Laws. Schedule 3.2 of the
Disclosure Schedule contains true and complete copies of the Articles of
Incorporation of the Buyer, including all amendments thereto (certified by the
Secretary of State of its jurisdiction of incorporation), and By-Laws of the
Company, including all amendments thereto (certified by its corporate
Secretary), as in effect on the date hereof and such By-Laws and Articles of
Incorporation will not be amended, rescinded or otherwise modified between the
date hereof and the Closing Date.
3.3 Authority of Buyer. Buyer has full power and legal capacity to
execute and deliver this Agreement and the other agreements required to be
executed and delivered by Buyer hereunder (this Agreement and such other
agreements being herein called the "Buyer Documents") and to carry out the
transactions contemplated hereby. The execution, delivery and performance of
the Buyer Documents by Buyer have been duly authorized by all necessary
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<PAGE> 19
action on the part of Buyer. The Buyer Documents are valid and binding
agreements of Buyer enforceable against Buyer in accordance with their
respective terms. Except as set forth in Schedule 3.3 of the Disclosure
Schedule, no consent, authorization or approval of, or declaration, filing or
registration with, any governmental or regulatory authority, or any consent,
authorization or approval of any third party, is necessary in order to enable
Buyer to enter into and perform Buyer's obligations under the Buyer Documents,
and not at the execution and delivery of the Buyer Documents nor the
consummation of the transactions contemplated thereby will:
(a) conflict with, require any consent under, result in
the violation of, or constitute a breach of any provision of the Articles of
Incorporation or By-Laws of the Buyer;
(b) conflict with, require any consent under, result in
the violation of, constitute a breach of, or accelerate the performance
required on the part of Buyer by the terms of, any evidence of indebtedness or
agreement to which the Buyer is a party, in each case with or without notice
for lapse of time or both, including any mortgage or deed of trust or other
agreement creating a lien, charge or encumbrance to which any property of the
Buyer is subject, or permit the termination of any such agreement by another
person;
(c) result in the creation of imposition of any security
interest, lien, charge or other encumbrance upon, or restriction on the use of,
any property or assets of the Buyer under any agreement or commitment to which
the Buyer is bound;
(d) accelerate, constitute an event entitling, or which
would, on notice or lapse of time or both, entitle the holder of any
indebtedness of the Buyer to accelerate the maturity of such indebtedness;
(e) conflict with or result in the breach of or violation
of any writ, judgment, order, injunction, decree or award of any court of
governmental body or agency or arbitration tribunal that is binding on the
Buyer;
(f) constitute a violation by the Buyer of any statute,
law, or regulation of any jurisdiction.
3.4 Securities Compliance.
(a) Buyer is acquiring the Stock solely for Buyer's own
account for investment purposes and not with a view to or an interest in
participating, directly or indirectly, in the resale thereof. Buyer's principal
place of business is located in the State of Georgia. Buyer acknowledges that
all Stock acquired by Buyer will be sold to Buyer without registration and
reliance upon certain exemptions under the federal Securities Act of 1933 as
amended, in reliance upon certain exemptions from registration requirements and
under applicable state securities laws. Buyer will make no transfer or
assignment of any of the stock except in compliance with the Securities Act of
1933, as amended, and any other applicable securities laws, or pursuant to
applicable exemptions from the aforementioned laws.
(b) Neither the Seller nor any person acting on its
behalf has offered the Stock to Buyer by means of general or public
solicitation or general or public advertising, such as newspaper or magazine
advertisements, by broadcast media, or at any seminar or meeting whose
attendees were solicited by such means.
(c) Buyer consents, agrees and acknowledges that the
certificate or certificates representing the Stock will be inscribed with the
following legend, or another legend to the same effect, and agrees to the
restrictions set forth therein:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities laws of any other jurisdiction, in
reliance upon exemptions from the registration requirements of
such laws. The shares represented by this certificate may not
be sold or otherwise transferred, nor will any assignee or
endorsee hereof be recognized as an owner of the shares by the
issuer unless: (i) a registration statement of the Securities
Act of 1933 and other applicable securities laws with respect
to the shares and the transfer shall then be in effect; or
(ii) in the opinion of counsel
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<PAGE> 20
satisfactory to the issuer, the shares are transferred in a
transaction which is exempt from the registration requirements
of such laws.
3.5 Pending Actions. There are no actions, suits, claims or
proceedings pending, or to the knowledge of Buyer, threatened against Buyer or
any of its subsidiary companies at law or in equity or by any governmental
agency or instrumentality, domestic or foreign, which materially adversely
affect or are likely to materially adversely affect, (a) Buyer's financial
condition, or (b) Buyer's right or ability to carry on its business
substantially as now conducted, considering such condition in business as being
the condition in business of Buyer and its subsidiary companies taken as a
whole.
3.6 Capital Stock. The authorized capital stock of Buyer consists
of 10,000,000 shares of common stock, $.01 par value per share (the "Common
Stock"), and 5,000,000 shares of preferred stock, $.01 par value. Prior to
Closing, Buyer shall have sufficient authorized and unissued common shares to
fulfill its obligations to pay the purchase price described in Section 1.2. As
of the date of this Agreement, 7,361,676 shares of common stock are outstanding
and no shares of preferred stock of the Buyer are outstanding. All the
outstanding shares of the common and preferred stock have been duly and validly
authorized and issued and are fully paid and non-assessable. Except for options
described on Schedule 3.6 of the Disclosure Schedule, as described in Schedule
3.6, there are no outstanding subscriptions, contracts, conversion privileges,
options, warrants, calls or other rights obligating Buyer to issue, sell or
otherwise dispose of, or to purchase, redeem or otherwise acquire any shares of
capital stock of Buyer, other than in connection with this Agreement. The
shares of common stock to be issued in connection with this Agreement, will,
upon such issuance and delivery to the recipients designated under the terms of
this Agreement, be duly authorized, validly issued, fully paid and
non-assessable, and free of any preemptive rights.
3.7 Absence of Changes. Except as set forth on Schedule 3.7 of the
Disclosure Schedule, and except as otherwise set forth in the Buyer's Proxy
Statement, 10-K and 10-Q's (each as defined in Section 11.4 hereof)
(collectively, the "SEC Documents") since October 31, 1995 there has not been
(i) any material change in the financial condition, assets, liabilities,
business or prospects of the Buyer, (ii) any material damage, destruction, or
loss, not fully covered by insurance, affecting the properties or business of
the Buyer, or (iii) any other event or condition that, individually or in the
aggregate, has been materially adverse in relation to the financial condition,
business or prospects of the Buyer.
3.8 Accuracy of SEC Documents. The financial statements
and schedules of Buyer contained in the SEC Documents (or incorporated therein
by reference) were prepared in accordance with generally accepted accounting
principles, consistently applied, except as noted therein and, except as set
forth in Schedule 3.8 of the Disclosure Schedule, fairly present the information
purported to be shown therein. Each such proxy statement or report did not, on
the date of its mailing (in the case of the Proxy Statement) or the date of its
filing with the SEC (in the case of the 10-K and 10-Q's) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Buyer has filed all
reports with the SEC required to be so filed by it since February 1, 1995, and
such reports to not contain any material misstatement or omit to disclose any
material fact relating to Buyer during the relevant reporting periods.
3.9 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Buyer is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
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ARTICLE IV
COVENANTS TO BE PERFORMED PRIOR TO THE CLOSING
The parties hereto covenant and agree that between the date hereof and
the Closing Date:
4.1 Operation in Ordinary Course. From the date hereof to the
Closing Date, Seller and Principals shall cause the Company to, and the Company
shall, (i) conduct its business only in the ordinary course and in
substantially the same manner as conducted at the date hereof, (ii) use its
reasonable best efforts to preserve its business organization intact and to
retain the services of its present officers, key employees, purchasing and
sales personnel and representatives, (iii) use its reasonable best efforts to
preserve favorable relations with its employees, customers, suppliers and
others having business relations with it, (iv) use its reasonable best efforts
to comply with all laws, ordinances and regulations applicable to it in the
conduct of its business, (v) not enter into, amend in any material respect or
terminate any lease, contract or agreement, and (vi) conduct its business in
such a manner that the representations and warranties contained in Article II
shall continue to be true and correct on and as of the Closing Date as if made
on and as of the Closing Date.
4.2 Notice of Events.
(a) The Seller shall promptly notify the Buyer of (i) any
event, condition or circumstance occurring from the date hereof through the
Closing Date that would constitute a violation or breach of this Agreement,
(ii) any event, occurrence, transaction or other item which would have been
required to have been disclosed on any Schedule or statement delivered
hereunder, had such event, occurrence, transaction or item existed on the date
hereof, other than items arising in the ordinary course of business which would
not render any representation or warranty of the Seller misleading, and (iii)
any lawsuits, claims, proceedings or investigations which after the date hereof
are threatened or commenced against Seller or against the Company or any
officer, director, employee, consultant, agent or shareholder with respect to
the affairs of the Company.
(b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 4.2(a) requires any change in the
Disclosure Schedule, or if any such event, condition, fact or circumstance
would require such a change assuming the Disclosure Schedule were dated as of
the date of the occurrence, existence or discovery of such event, condition,
fact or circumstance, then the Seller or the Principals shall promptly deliver
to Buyer an update to the Disclosure Schedule specifying such change. Upon
receipt of any such updated Disclosure Schedule from the Seller or Principals,
Buyer shall have the right to terminate this Agreement in accordance with
Section 9.1(d) by giving notice in accordance with Section 12.8 within 7 days
following delivery of such updated Disclosure Schedule to Buyer. If Buyer fails
to give such notice within such 7 day period, the Disclosure Schedule shall
be deemed amended to include the updated information for all purposes
hereunder. The parties acknowledge that as of the date of this Agreement, the
Seller and Principals have not yet delivered a complete Disclosure Schedule.
The Seller and Principals agree to deliver a completed final Disclosure
Schedule (subject to updates as provided above) within 10 days following the
date of this Agreement. Buyer shall have a 7-day option to terminate following
delivery of such completed final Disclosure Schedule in the same manner as with
an updated Disclosure Schedule as described above.
4.3 Exclusive Dealing. During the period from the date of this
Agreement to the Closing Date, neither Seller nor the Principals shall not
take, and Seller and the Principals shall cause the Company to refrain from
taking, any action to directly or indirectly encourage, initiate or engage in
discussions or negotiations with, or provide any information to, any
corporation, partnership, person, or other entity or group, other than Buyer,
concerning the merger of the Company with any other entity, the purchase and
sale of the assets and properties of the Company, the purchase and sale of the
Stock, or any transaction similar to the foregoing involving either the Company
or Seller.
4.4 Examinations and Investigations. Prior to the Closing Date,
Buyer shall be entitled, through its employees and representatives, including,
without limitation, its counsel, Smith, Gambrell & Russell, and Buyer's
accountants, to make such investigation of the assets, properties, business and
operations of the Company, and such examination of the books, records and
financial condition of the Company as Buyer wishes. Any such investigation and
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examination shall be conducted at reasonable times and under reasonable
circumstances and Seller and the Principals shall cause the Company to,
cooperate fully therein. No investigation by Buyer shall diminish or obviate
any of the representations, warranties, covenants or agreements of Seller and
the Principals under this Agreement, or Buyer's rights under Article VIII of
this Agreement. In order that Buyer may have full opportunity to make such
business, accounting and legal review, examination or investigation as it may
wish of the business and affairs of the Company, Seller and the Principals
shall furnish, and shall cause the Company to furnish, the representatives of
Buyer during such period with all such information and copies of such documents
concerning the affairs of the Company as such representatives may reasonably
request and cause its officers, employees, consultants, agents, accountants and
attorneys to cooperate fully with such representatives in connection with such
review and examination. If this Agreement terminates, Buyer, its employees and
representatives shall keep confidential and shall not use in any manner any
information or documents obtained from the Company concerning its assets,
properties, business and operations, unless readily ascertainable from public
or published information, or trade sources, or subsequently developed by Buyer
independent of any investigation of the Company, or received from a third party
not under an obligation to the Company or Seller to keep such information
confidential. If this Agreement terminates, any documents obtained from Seller
or the Company shall be returned and the confidentiality obligations herein
shall survive for so long as such information remains confidential.
4.5 Affiliate Indebtedness Owed to the Company. At or prior to the
Closing, the Seller and the Principals shall, and shall cause each Affiliate of
the Seller and the Principals to, pay to the Company any amounts owed by such
person to the Company and any amounts owed by Seller or the Principals or any
such Affiliate to any other person if such indebtedness is guaranteed by, or
secured by any of the assets or properties of, the Company.
4.6 Affiliate Indebtedness Owed by the Company. Except as set
forth in Schedule 4.6 of the Disclosure Schedule, any and all indebtedness of
the Company to Seller or the Principals, and any Affiliate of the Seller or the
Principals and any director, officer or employee of any of the foregoing
(including all intercompany accounts) shall be repaid or contributed to the
capital of the Company as of the Closing Date.
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE
The obligation of the Buyer to enter into and complete the Closing is
subject, at Buyer's option, to the fulfillment on or prior to the Closing Date
of the following conditions, any one or more of which may be waived by Buyer
only in writing:
5.1 Representations and Covenants. The representations and
warranties of Seller and the Principals contained in this Agreement shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date. Seller and the
Principals shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by the Seller and the Principals on or prior to the Closing Date. The
Seller and the Principals shall deliver to the Buyer a certificate dated the
Closing Date to such effect.
5.2 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted
or threatened by any governmental or regulatory body, to restrain, modify or
prevent the carrying out of the transactions contemplated by this Agreement or
to seek damages or a discovery order in connection with such transactions, or
that has or could reasonably be expected to have, in the opinion of Buyer, a
materially adverse effect on the assets, properties, business, operations or
financial condition of the Company.
5.3 Net Worth and Cash of the Company. The total combined revenues
of PSI and HSI for the period January 1, 1995 through December 31, 1995, shall
have been at least $300,000, as determined by Habif, Arogeti & Wynne, P.C.
Seller shall deliver to the Buyer a certificate dated the Closing Date to such
effect.
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5.4 Governmental Permits and Approvals. All permits and approvals
from any governmental or regulatory body required for the lawful consummation
of the Closing and the continued operation of the business of the Company shall
have been obtained.
5.5 Third Party Consents. All consents, permits, waivers and
approvals from parties to material contracts or other agreements with the
Company or with Seller that may be required in connection with the performance
by the Seller of its obligations under this Agreement or the continuance of
such contracts or other agreements with the Company without material
modification after the Closing shall have been obtained (with satisfactory
written evidence thereof, and with recordable form where necessary, to be
furnished to the Buyer at the Closing).
5.6 Transfer Taxes. Seller shall have paid, or caused to be paid,
all stock transfer and other taxes required to be paid in connection with the
sale and delivery to Buyer of the Stock, and shall have caused all appropriate
stock transfer tax stamps to be affixed to the certificates representing the
Stock.
5.7 Estoppel Certificates. Buyer shall have received such estoppel
certificates from parties to any or all of the leases, purchase options and
options to sell as Buyer may reasonably request.
5.8 No Material Adverse Change. Prior to the Closing Date, there
shall be no material adverse change in the assets or liabilities, the business
or condition, (financial or otherwise) of the Company, its employees or
customers regardless of reason, including, but not limited, to those changes
that are as a result of any legislative or regulatory change, revocation of any
license or rights to do business, failure to obtain any environmental permits
at the normal time or in the manner applied for by the Company, fire,
explosion, accident, casualty, labor trouble, flood, riot, storm, condemnation
or act of God or other public force or otherwise. Seller shall have delivered
to Buyer a certificate, dated the Closing Date, to such effect.
5.9 Books and Records. Buyer shall have received the minute books,
stock certificate books, stock transfer books, corporate seals, books of
account and all books, papers, records, correspondence and instruments of, or
relating to, the Company and its business. Buyer shall have completed its
investigation of the Company, its business and its operations and Buyer shall
have completed its examination of books and records of the Company, and the
results thereof shall be acceptable to Buyer.
5.10 Good Standing Certificates, Etc. Seller shall have delivered
all certified resolutions, certificates, documents or instruments with respect
to the Company's corporate existence and authority as the Buyer may have
reasonably requested prior to the Closing Date.
5.11 Non-Compete Agreements. Simultaneously with the Closing of the
transactions contemplated hereby, each of the Seller and the Principals shall
have executed and delivered to the Company a Non-Competition Agreement in
substantially the form attached as Exhibit C hereto.
5.12 Subscription Agreement. Simultaneously with the closing of the
transactions contemplated hereby, Seller shall have executed and delivered to
the Company, a Subscription Agreement in substantially the form attached as
Exhibit D hereto.
5.13 Authorization of Shares. The Shareholders of Buyer shall have
approved an amendment to the Buyer's Articles of Incorporation authorizing a
sufficient number of additional shares of Buyer's common stock to enable Buyer
to pay the Purchase Price described in Section 1.2 hereof.
5.14 Ratification of Agreement. The Shareholders of Buyer shall
have ratified this Agreement and the transactions contemplated herein.
5.15 Closing of AUBIS Acquisition. The Shareholders of Buyer shall
have ratified the Amended and Restated Merger Agreement dated as of December
13, 1995 and amended and restated as of March 29, 1996 among Buyer, AUBIS
L.L.C., AUBIS Hospitality Systems, Inc., AUBIS Systems Integration, Inc. and
certain persons and
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<PAGE> 24
affiliates of AUBIS L.L.C. (the "AUBIS Merger Agreement") and the transactions
contemplated therein. All conditions to the Closing required pursuant to the
AUBIS Merger Agreement shall have been satisfied or waived prior to Closing.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE
The obligation of the Seller to enter into and complete the Closing is
subject, at Seller's option, to the fulfillment of the following conditions,
any one or more of which may be waived by Seller only in writing:
6.1 Representations and Covenants. The representations and
warranties of Buyer contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date. Buyer shall have performed and complied
with in all material respects all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date. Buyer shall deliver to Seller a certificate dated the Closing Date to
such effect signed by an executive officer of Buyer.
6.2 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted
or threatened by any governmental or regulatory body, to restrain, modify or
prevent the carrying out of the transactions contemplated hereby, or to seek
damages or a discovery order in connection with such transaction, or that has
or could reasonably be expected to have, in the opinion of Seller, a materially
adverse effect on the assets, properties, business, operations or financial
condition of Buyer.
6.3 Governmental Permits and Approvals. All permits and approvals
from any governmental or regulatory body required for the lawful consummation
of the Closing and the continued operation of the business of the Company shall
have been obtained.
6.4 Resolutions. There shall have been delivered to the Seller a
copy of the resolutions duly adopted by the board of directors of Buyer,
certified accurate by an executive officer of Buyer as of the Closing Date,
authorizing and approving the execution and delivery by Buyer of this
Agreement, and the consummation by the Buyer of the transactions contemplated
hereby.
6.5 Good Standing Certificates, etc. Buyer shall have delivered
all such certified resolutions, certificates, documents or instruments with
respect to Buyer's corporate existence and authority as Seller's counsel may
have reasonably requested prior to the Closing Date.
6.6 Authorization of Shares. The Shareholders of Buyer shall have
approved an amendment to the Buyer's Articles of Incorporation authorizing a
sufficient number of additional shares of Buyer's common stock to enable Buyer
to pay the purchase price described in Section 1.2 hereof.
6.7 Ratification of Agreement. The Shareholders of Buyer shall
have ratified this Agreement and the transactions contemplated herein.
6.8 Closing of AUBIS Acquisition. The Shareholders of Buyer shall
have ratified the AUBIS Merger Agreement and the transactions contemplated
therein. All conditions to the Closing required pursuant to the AUBIS Merger
Agreement shall have been satisfied or waived prior to Closing.
ARTICLE VII
ACTIONS TO BE TAKEN AT THE CLOSING
The following actions shall be taken at the Closing, each of which shall
be conditioned on completion of all the others and all of which shall be deemed
to have taken place simultaneously:
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7.1 Stock Certificates. Seller shall deliver to Buyer stock
certificate(s) representing all of the Stock, duly endorsed in blank or
accompanied by stock powers duly executed in blank, in proper form for
transfer, in accordance with the terms of Section 1.1 of this Agreement.
7.2 Purchase Price. Buyer shall deliver to Seller the portion of
the Purchase Price payable at Closing in accordance with the terms of Section
1.2 of this Agreement.
7.3 Opinion of Counsel to the Sellers. The Seller shall deliver to
Buyer an opinion of Kilpatrick & Cody, counsel to Seller, dated the Closing
Date, substantially in the form attached hereto as Exhibit F.
7.4 Opinion of Counsel to the Buyer. Buyer shall deliver to Seller
an opinion of Smith, Gambrell & Russell, counsel to Buyer, dated the Closing
Date, substantially in the form attached hereto as Exhibit G.
7.5 Resignations of Directors and Officers. Seller shall deliver
signed resignations of any director and officer of the Company requested by
Buyer dated the Closing Date.
7.6 Closing Certificate of the Seller. Seller shall deliver to
Buyer a closing certificate signed by Seller, dated the Closing Date, in a form
reasonably satisfactory to the Buyer.
7.7 Closing Certificate of the Buyer. Buyer shall deliver to
Seller a closing certificate signed by an executive officer of Buyer, dated the
Closing Date, in a form reasonably satisfactory to Seller.
7.8 Other Documents and Certificates. Buyer and Seller shall
deliver, or with respect to Seller cause the Company to deliver, certificates,
agreements, permits, approvals and other documents reasonably requested by
counsel for Buyer or Seller, as the case may be, to satisfy, or to evidence the
satisfaction of, as the case may be, the conditions precedent to Closing set
forth in Articles V and VI.
7.9 Election of Board of Directors. The Buyer and Seller shall
take such actions as are necessary to provide that immediately following the
Closing, the Board of Directors of the Company shall be comprised of the
following individuals: Paul Harrison, Larry Fisher, Nate Lipson and James
Askew.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties. All of the
representations and warranties of Seller, Principals and Buyer contained in
this Agreement shall survive the Closing and shall continue for a period of one
year following the Closing Date; except that representations and warranties
contained in Sections 2.4, 2.13, 2.24 and 2.26 shall survive until expiration
of the applicable statutes of limitation for breach of such representations and
warranties. The expiration of any representation or warranty shall not affect
any party's right to claim indemnification for a breach of such representation
or warranty, provided such party gives notice of such claim in accordance with
the provisions of this Article VIII prior to the expiration of such
representation or warranty.
8.2 Seller's and Principals' Indemnity Agreement. Subject to the
provisions of Section 8.6 hereof, the Seller and the Principals, jointly and
severally, shall defend, indemnify and hold harmless the Buyer and the Company
(and their respective directors, officers, employees, agents, affiliates,
successors and assigns) from and against any and all direct or indirect
requests, demands, claims, payments, defenses, obligations, recoveries,
deficiencies, fines, penalties, interest, assessments, actions, liens, causes
of action, suits, proceedings, judgments, losses, damages (including without
limitation punitive, exemplary or consequential damages, lost income and
profits, interruptions of business and diminution in the value of the Stock),
liabilities, costs, and expenses of any kind (including without limitation (i)
interest, penalties and reasonable attorneys' fees and expenses, (ii)
attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder), and interest on any amount
payable as a result of the foregoing, whether accrued, absolute, contingent,
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known, unknown, or otherwise as of the Closing Date or thereafter asserted
against, imposed upon or incurred by Buyer, the Company or any of their
respective directors, officers, employees, agents, affiliates, successors or
assigns (a "Loss of Buyer") by reason of, resulting from, arising out of, based
upon, awarded or asserted against in respect of or otherwise in respect of:
(a) any period or periods of the Company ending prior to
the Closing and which involve any claims against Buyer, the Company or the
Company's properties or assets relating to actions or inactions of Seller or
the Company or their respective officers, directors, shareholders, employees or
agents prior to Closing, or the operation of the business of the Company prior
to the Closing unless such liability was disclosed on the Financial Statements
and adequate reserves were established therefor;
(b) any breach of any representation and warranty or any
misrepresentation in or omission on the part of Seller or Principals contained
in any certificate furnished or to be furnished to Buyer by Seller pursuant to
this Agreement;
(c) any breach or nonfulfillment on the Part of Seller or
Principals of any covenant contained in this Agreement;
(d) any failure of the Seller to transfer the Stock to
Buyer, free and clear of all liens, encumbrances, equities, restrictions,
claims and obligations;
(e) the failure of Seller to obtain, prior to the Closing
Date, any consents, approvals and waivers of governmental agencies or entities,
lessors, landlords, suppliers, and other third parties as may be necessary to
permit the consummation of the transactions contemplated hereby and to permit
Buyer to continue to operate the business of the Company in the manner
presently conducted after the Closing Date;
(f) (i) any Hazardous Materials existing on the Closing
Date on, in, under or affecting, or originating from, all or any portion of the
Company's or its predecessors' in interest present or former properties or
assets or any surrounding areas or any other property now or previously used,
owned by or under the control of the Company or its predecessors in interest
that results or may result in actual or alleged liability on the part of the
Company, regardless of whether or not presently known or caused by or within the
control of the Company or its predecessors in interest; (ii) the violation of or
noncompliance with any Environmental Law relating to or affecting the Company or
its predecessors in interest or its or their present or former business,
properties or assets to the extent the violation or compliance relates to acts
or events occurring on or prior to the Closing Date or state of affairs or
circumstances existing on or prior to the Closing Date; and
(g) any federal, state, local or foreign taxes, including
any interest and penalties thereon, due from the Company or the Seller with
respect to any period prior to the Closing Date, other than amounts accrued
therefor on the Financial Statements.
8.3 Buyer's Indemnity Agreement. Buyer shall indemnify and hold
harmless Seller (and its directors, officers, employees, agents, affiliates,
successors and assigns) from and against any and all direct or indirect
requests, demands, claims, payments, defenses, obligations, recoveries,
deficiencies, fines, penalties, interest, assessments, actions, liens, causes
of action, suits, proceedings, judgments, losses, damages (including without
limitation punitive, exemplary or consequential damages and lost income and
profits and interruptions of business), liabilities, costs, and expenses of any
kind (including without limitation (i) interest, penalties and reasonable
attorneys' fees and expenses (ii) attorneys' fees and expenses necessary to
enforce their rights to indemnification hereunder, and (iii) consultants' fees
and other costs of defending or investigating any claim hereunder, and interest
on any amount payable as a result of the foregoing) whether accrued, absolute,
contingent, known, unknown or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by Seller or its respective
representatives or assigns, (a "Loss of Seller") by reason of, resulting from,
arising out of, based upon, awarded or asserted against in respect of or
otherwise in respect of:
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(a) any period or periods of the Company beginning after
the Closing and which involve any claims against Seller or its assets relating
to actions or inactions of the Buyer or the Company or their respective
officers, directors, shareholders, employees or agents after the Closing, or
the operation of the Company after the Closing (except to the extent any of the
foregoing arise from the acts or omissions of the Sellers); and
(b) any breach of any representation and warranty or
nonfulfillment of any covenant or agreement on the part of the Buyer contained
in this Agreement, or any misrepresentation in or omission from or
nonfulfillment of any covenant on the part of the Buyer contained in any
certificate furnished or to be furnished to Seller by Buyer pursuant to this
Agreement.
8.4 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, the party to be
indemnified hereunder (the "Indemnitee") shall promptly notify the indemnifying
party hereunder (the "Indemnitor") in writing of any damage, claim, loss,
liability or expense or other matter which the Indemnitee has determined has
given or could give rise to a claim for which indemnification rights are
granted hereunder (such written notice referred to as the "Notice of Claim").
The Notice of Claim shall specify, in all reasonable detail, the nature and
estimated amount of any such claim giving rise to a right of indemnification,
to the extent the same can reasonably be estimated. Any failure on the part of
an Indemnitee to give timely notice to the Indemnitor of a claim shall not
affect the right of the Indemnitee to obtain indemnification from the
Indemnitor with respect to such claim unless the Indemnitor is actually harmed
by such failure to notify, and only to the extent of such actual harm.
(b) With respect to any matter set forth in a Notice of Claim
relating to a third party claim the Indemnitor shall defend, in good faith and
at its expense, any such claim or demand, and the Indemnitee, at its expense,
shall have the right to participate in the defense of any such third party
claim. So long as Indemnitor is defending, in good faith, any such third party
claim, the Indemnitee shall not settle or compromise such third party claim.
The Indemnitee shall make available to the Indemnitor or its representatives
all records and other materials reasonably required by them for use in
contesting any third party claim and shall cooperate fully with the Indemnitor
in the defense of all such claims. If the Indemnitor does not defend any such
third party claim or if the Indemnitor does not provide the Indemnitee with
prompt and reasonable assurances that the Indemnitor will satisfy the third
party claim, the Indemnitee may, at its option, elect to defend any such third
party claim, at the Indemnitor's expense. An Indemnitor may not settle or
compromise any claim without obtaining a full and unconditional release of the
Indemnitee, unless the Indemnitee consents in writing to such settlement or
compromise. Notwithstanding the foregoing, if there is a reasonable probability
that a third party claim for which the Buyer has indemnification rights against
Seller hereunder will materially and adversely affect Buyer or the Company other
than as a result of money damages or other payments, Buyer shall be entitled to
conduct the defense of such claim at Sellers' expense.
8.5 Set-off. Buyer shall have the right to set-off and apply
against all amounts due and owing Seller under Section 1.2 of this Agreement,
and under any other agreement between Buyer and Seller, all sums in respect of
which Seller or Principals may be liable pursuant to Section 8.2 hereof, such
right of set-off to be in addition to and not in lieu of or an election against
any and all other remedies available to the Buyer under this Agreement or at
law or in equity.
8.6 Limitations on Liability of Seller and Principals. Seller and
Principals shall have no liability with respect to losses of Buyer arising
under subparagraphs (a), (b), (e), or (f) of Section 8.2 until the total of all
Losses of Buyer with respect thereto exceeds $25,000. If the aggregate Losses
of Buyer exceed such $25,000 threshold, the Seller and Principals shall be
liable for all Losses of Buyer to the extent (and only to the extent) Losses of
Buyer exceed such $25,000 threshold. In no event shall Seller and Principals'
aggregate liability under Section 8.2 exceed $125,000.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 Termination. This Agreement may be terminated prior to the
Closing as follows:
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(a) at the election of Seller, if any one or more of the
conditions to the obligations of Seller to close has not been fulfilled as of
the Closing Date, or if the Buyer has breached any representation, warranty,
covenant or agreement contained in this Agreement;
(b) at the election of Buyer, if any one or more of the
conditions to its obligations to close has not been fulfilled as of the Closing
Date, or if Seller or Principals have breached any representation, warranty,
covenant or agreement contained in this Agreement;
(c) at the election of Seller or Buyer, if any legal
proceeding is commenced or threatened by any governmental or regulatory body or
other person directed against the consummation of the Closing or any other
transaction contemplated under this Agreement and either Sellers or Buyer, as
the case may be, reasonably and in good faith deem it impractical or
inadvisable to proceed in view of such legal proceeding or threat thereof;
(d) at the election of Buyer, under the circumstances
described in Section 4.2(b);
(e) at any time on or prior to the Closing Date, by
mutual written consent of the parties hereto; or
(f) at any time after June 30, 1996, at the election of
either the Buyer or the Seller.
9.2 Survival. If this Agreement is terminated pursuant to Section
9.1, this Agreement shall become void and of no further force and effect,
except for the provisions of Section 4.4 relating to the obligation of the
Buyer to keep certain information confidential, Section 12.4 (relating to
expenses), Section 12.1 (relating to publicity), and Section 12.5 (relating to
indemnification of brokerage) and none of the parties hereto shall have any
liability in respect of such termination except that any party shall be liable
to the extent that failure to satisfy the conditions of Article V, VI or VII
results from such party acting in bad faith or from the intentional or willful
violation of the representations, warranties, covenants or agreements of such
party under this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
IN CONNECTION WITH OFFER OF BUYER'S STOCK
Seller does hereby represent and warrant to the Buyer as follows:
10.1 Accredited Investor. Seller is an "accredited investor" as
such term is defined under Rule 501 under the federal Securities Act of 1933,
as amended (the "Securities Act"), and is an entity having its principal office
and principal place of business, and the location in which it entered into and
accepted this Agreement, in Georgia.
10.2 Acquisition for Investment. The shares of Buyer's common stock
which Seller may acquire pursuant to the terms of this Agreement (the
"Acquisition Shares") are being acquired by Seller solely for the account of
Seller, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act.
10.3 Unregistered Securities. Seller understands and acknowledges
that the Acquisition Shares have not been registered under the Securities Act
or under the Georgia Securities Act of 1973, as amended (the "Georgia Act"),
and will not at the time of issuance and delivery of such shares as
contemplated by the terms of this Agreement have been so registered, in
reliance upon certain exemptions from the registration and prospectus delivery
requirements of the Securities Act and the Georgia Act, particularly including
Section 10-5-9(13) of the Georgia Act. Seller understands that the Acquisition
Shares so acquired by Seller must be held by Seller indefinitely, and that
Seller must therefore bear the economic risk of such investment indefinitely,
unless a subsequent disposition thereof is registered under the Securities Act
and the Georgia Act, or is exempt from such registration. Seller further
understands that the availability of the exemptions described in the first
sentence of this Section depend upon, among other things, the bona fide nature
of Seller's investment intent expressed herein, upon which the Buyer hereby
expressly relies.
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<PAGE> 29
10.4 Disclosure.
(a) Seller has previously been furnished by the Buyer,
and hereby acknowledges that Seller has had the opportunity to review (i) a
draft of the preliminary Proxy Statement for the Buyer's 1996 Annual Meeting of
Shareholders (the "Proxy Statement"); (ii) the Buyer's Annual Report to
Shareholders for the fiscal year ended January 31, 1995 (the "ARS"); (iii) the
Buyer's Annual Report on Form 10-KSB for the fiscal year ended January 31, 1995
(the "10-K") as filed with the United States Securities and Exchange Commission
(the "SEC") pursuant to the requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act"); and (iv) the Buyer's quarterly reports on
Form 10-QSB for the fiscal quarters ended April 30, 1995, July 31, 1995 and
October 31, 1995, respectively (the "10-Q's"), as filed with the SEC pursuant
to the requirements of the 1934 Act.
(b) Seller has been given a reasonable opportunity to
request copies of any documents or other exhibits which are listed as exhibits
therein to any of the Proxy Statement, the 10-K or the 10-Q's, and if
requested, copies of such documents or other exhibits have been provided to
Seller a reasonable time prior to Seller's execution of this Agreement.
(c) Seller has been given the opportunity, at a
reasonable time prior to the execution of this Agreement, to ask questions of
the executive officers and other personnel of the Buyer concerning the terms
and conditions of such party's acquisition of the Acquisition Shares in the
transactions contemplated by this Agreement, and concerning the subject matter
of the representations and warranties of the Buyer contained herein, as well as
to obtain any additional information which the Buyer possesses or can obtain
without unreasonable effort or expense that is necessary to verify the
information contained in the representations and warranties of Buyer set forth
in this Agreement or the information contained in the documents and reports
described in paragraph (a) of this Section.
ARTICLE XI
REGISTRATION OF SHARES
11.1 Registration Statement.
(a) After the Closing Date, Buyer shall file with the SEC
a registration statement (the "Registration Statement") with respect to resales
of the Acquisition Shares received by each Participating Holder (as defined in
Section 11.1(d)). Buyer shall use reasonable efforts: (i) to cause the
Registration Statement to be declared effective by the SEC on or before the
date 90 days after the Closing Date; and (ii) to cause the Registration
Statement to remain effective until the earlier of (A) the third anniversary of
the Closing Date, or (B) the date on which the distribution described in the
Registration Statement is completed as to all Participating Holders (as defined
in subsection (iii) below).
(b) Buyer shall (at its own expense):
(i) prepare and file promptly with the SEC such
amendments to the Registration Statement, and such supplements to the related
prospectus, as may be required in order to comply with the applicable
provisions of the Securities Act, including, without limitation, to maintain
the effectiveness or currency thereof;
(ii) furnish to the respective Participating
Holders such numbers of copies of a prospectus conforming to the requirements
of the Securities Act as they may reasonably request in order to facilitate the
disposition of the shares covered by the Registration Statement; and
(iii) use reasonable efforts to register and
qualify the shares covered by the Registration Statement under the Securities
laws of such states as the respective Participating Holders may reasonably
request, provided, however, that Buyer shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any of such states.
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<PAGE> 30
(c) Notwithstanding anything to the contrary herein, no
Person who receives Acquisition Shares shall have any rights under this Section
11 unless such Person executes and delivers to Buyer, a written agreement,
reasonably satisfactory in form and content to Buyer, confirming that such
Person wishes to be allowed to sell Acquisition Shares pursuant to the
Registration Statement and agrees to be bound by the provisions of this Article
11. (A Person who holds any of the Acquisition Shares and who executes and
delivers such an agreement is referred to in this Article 11 as a
"Participating Holder.") Any Participating Holder who delivers such an
agreement more than 30 days after the Closing Date may be required to pay, as a
condition to exercising rights under this Article 11, the amount of incremental
expenses incurred by Buyer in complying therewith. No Participating Holder
shall sell any Acquisition Shares pursuant to the Registration Statement at any
time Buyer shall have furnished written notice that the Registration Statement
is not then effective or the prospectus that forms a part thereof is not
current.
(d) Notwithstanding anything to the contrary contained
herein, all of Buyer's obligations under this Section 11.1 (including its
obligation to file and maintain the effectiveness of the Registration
Statement) shall terminate and expire as of the earliest date on which all of
the shares of Acquisition Shares can be sold without any restrictions as to
volume or manner of sale pursuant to subsection (k) of Rule 144 under the
Securities Act.
11.2 Indemnification.
(a) Buyer agrees to indemnify, to the extent permitted by
law, each Participating Holder against all Damages suffered by such
Participating Holder as a result of any untrue or alleged untrue statement of
material fact contained in the Registration Statement or in the related
prospectus or preliminary prospectus (or in any amendment thereof or supplement
thereto) or as a result of any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such untrue statement or omission or alleged
untrue statement or omission results from or is contained in any information
furnished in writing to Buyer by such Participating Holder for use therein or
results from such Participating Holder's failure to deliver a copy of a
Registration Statement or related prospectus (or any amendment thereof or
supplement thereto) after Buyer has furnished such Participating Holder with a
sufficient number of copies thereof.
(b) In connection with the Registration Statement, each
Participating Holder (i) shall furnish to Buyer in writing such information and
affidavits as Buyer reasonably requests for use in connection with such
Registration Statement or the related prospectus, and (ii) to the extent
permitted by law, will indemnify Buyer, its directors and officers and each
Person who controls Buyer (within the meaning of the Securities Act) against
all Damages resulting from any untrue or alleged untrue statement of material
fact contained in such Registration Statement or in the related prospectus or
preliminary prospectus (or in any amendment thereof or supplement thereto) or
from any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to
the extent that such untrue statement or omission or alleged untrue statement
or omission results from or is contained in any information or affidavit
furnished in writing by such Participating Holder.
(c) Any Person entitled to indemnification under this
Article 11 will (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification, and (ii) unless in the
indemnified party's reasonable judgment a conflict of interest exists between
the indemnified party and the indemnifying party with respect to such claim,
permit the indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any consent to
the entry of any judgment or any settlement made by the indemnified party
without the indemnifying party's consent (but such consent will not be
unreasonably withheld). Any indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will pay the fees and expenses of
only one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest exists between such indemnified party and any
other indemnified party with respect to such claim (in which case the
indemnifying party will pay the fees and expenses of additional counsel).
11.3 Delay of Registration. For a period not to exceed 90 days,
Buyer may delay the filing or effectiveness of the Registration Statement, or
suspend the use of the Registration Statement (and the Participating Holders
hereby agree not to offer or sell any shares of Buyer's common stock pursuant
to the Registration Statement during such period),
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<PAGE> 31
at any time when Buyer, in its reasonable judgment (confirmed in writing if
requested by any Participating Holder), believes:
(a) that the filing of a Registration Statement or the
offering or sale of Buyer's common stock pursuant thereto, or the making of any
required disclosure in connection therewith, could reasonably be expected to
have a material adverse effect upon (i) a pending or scheduled offering of
Buyer's securities, (ii) an acquisition, merger, consolidation, joint venture,
equity investment or other potentially significant transaction or event, or
(iii) any negotiations, discussions or proposal with respect to any of the
foregoing; and
(b) that the failure to disclose any material information
with respect to any of the foregoing could result in a violation of the
Securities Act, the Exchange Act or any provision of any state securities law.
In the event Buyer reasonably believes that any of the foregoing circumstances
are continuing after such 90-day period, it may, with the consent of the
holders of a majority of the shares of Buyer's common stock subject (or to be
subject) to the Registration Statement (which consent shall not be unreasonably
withheld) extend such 90-day period for one additional 30-day period.
11.4 Amendment of Section 11. Notwithstanding anything to the
contrary contained in this Agreement, the provisions of this Section 11 may be
amended by Buyer at any time with the consent of the holders of a majority of
the shares of Buyer's common stock that are at that time subject (or to be
subject) to the Registration Statement.
ARTICLE XII
MISCELLANEOUS
12.1 Publicity. Except as otherwise required by law or stock
exchange rules, none of the parties hereto shall issue any press release or
make any other public statement, in each case relating to or in connection with
or arising out of this Agreement or the matters contained herein, without
obtaining the prior written approval of all parties hereto as to the contents
and manner of presentation and publication thereof.
12.2 Knowledge. Where any representation or warranty contained in
this Agreement is expressly qualified by reference to the knowledge,
information or belief of the Seller or Principals, Seller and each Principal
confirms that such party has made due and diligent inquiry as to the matters
that are the subject of such representations and warranties.
12.3 Gender. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
12.4 Expenses. The Buyer, the Seller and the Principals shall pay
their own respective expenses, including the fees and disbursements of their
respective counsel in connection with the negotiation, preparation and
execution of this Agreement and the consummation of the transactions
contemplated hereby. The Seller's and Principals' expenses in connection with
the negotiation, preparation and execution of this Agreement and the
consummation of the transactions contemplated hereby shall not be borne by the
Company.
12.5 Brokerage Commissions and Finder's Fees. Each of the parties
represents and warrants to the others that it has not hired, retained or dealt
with any broker, finder or investment banker or in connection with the
transactions contemplated by this Agreement, and will defend, indemnify and
hold the other parties harmless from and against any and all claims for
finder's fees or brokerage or other commissions which may at any time be
asserted against any of such other parties founded upon a claim which is
inconsistent with the aforesaid representation and warranty of the indemnifying
party, together with any and all losses, damages, costs and expenses (including
reasonable attorneys' fees) relating to such claims or arising therefrom or
incurred by the indemnified party in connection with the enforcement of this
indemnification provision.
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12.6 Entire Agreement. This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement of the parties with respect
to the subject matter hereof, supersedes all prior agreements, negotiations or
letters of intent, and may not be modified, amended or terminated except by a
written instrument specifically referring to this Agreement signed by each of
the parties hereto.
12.7 Waivers and Consents. All waivers and consents given hereunder
shall be in writing. No waiver by any party hereto of any breach or anticipated
breach of any provision hereof by any other party shall be deemed a waiver of
any other contemporaneous, preceding or succeeding breach or anticipated
breach, whether or not similar, on the part of the same or any other party.
12.8 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given only if and when (i)
personally delivered or (ii) three (3) business days after mailing, postage
prepaid, by certified mail or (iii) when delivered (as evidenced by a receipt)
by a nationally recognized overnight delivery service, or (iv) by facsimile (as
evidenced by written confirmation of transmission and receipt) addressed in
each case as follows:
(a) If to the Seller and the Principals to:
HALIS, L.L.C.
200 Hembree Park Drive
Suite K
Roswell, Georgia 30076
Attention: Paul Harrison
with a copy in like manner to:
Kilpatrick & Cody
1100 Peachtree Street, Suite 2800
Atlanta, Georgia 30209-4530
Attention: Brian L. Schleicher, Esq.
Facsimile No.: (404) 815-6555
(b) If to the Buyer to
Fisher Business Systems, Inc.
900 Circle 75 Parkway
Suite 1700
Atlanta, Georgia 30339
Attention: Larry Fisher
Facsimile No.: (770) 857-4454
with a copy in like manner to:
Smith, Gambrell & Russell
3343 Peachtree Road
Suite 1800
Atlanta, Georgia 30326
Attention: William L. Meyer, Esq.
Facsimile No.: (404) 264-2652
Each party may change its address for the giving of notices and communications
to it, and/or copies thereof, by written notice to the other parties in
conformity with the foregoing.
12.9 Rights of Third Parties. All conditions of the obligations of
the parties hereto, and all undertakings herein, are solely and exclusively for
the benefit of the parties hereto and the Company and their respective
successors
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<PAGE> 33
and assigns, and no other person or entity shall have standing to require
satisfaction of such conditions or to enforce such undertakings in accordance
with their terms, or be entitled to assume that any party hereto will refuse to
consummate the purchase and sale contemplated hereby in the absence of strict
compliance with any or all thereof, and no other person or entity shall, under
any circumstances, be deemed a beneficiary of such conditions or undertakings,
any or all of which may be freely waived in whole or in part, by mutual consent
of the parties hereto at any time, if in their sole discretion they deem it
desirable to do so.
12.10 Headings. The Table of Contents and Article and Section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
12.11 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the internal
laws of the State of Georgia.
12.12 Jurisdiction. Any judicial proceeding brought against any of
the parties to this Agreement on any dispute arising out of this Agreement or
any matter related hereto may be brought in the courts of the State of Georgia,
or in the United States District Court for the Northern District of Georgia,
and, by execution and delivery of this Agreement, each of the parties to this
Agreement accepts for himself the exclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement.
12.13 Parties in Interest. After the Closing the Buyer may transfer
and assign this Agreement and its rights hereunder to any purchaser of, or
other successor to, the business or assets of the Company. Except as expressly
stated above, this Agreement may not be transferred, assigned, pledged or
hypothecated by either party hereto, other than by operation of law or with the
consent of the other party. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.
12.14 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
12.15 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
12.16 Arbitration.
(a) Any controversy or claim arising out of or relating
to this Agreement, the agreements to be entered into between or among the
parties hereto pursuant to this Agreement or the transactions contemplated
hereby and thereby, shall be submitted to and be finally resolves by
arbitration pursuant to the provisions of the United States Arbitration Act (9
U.S.C. Section 1 et seq.), to be conducted by the American Arbitration
Association ("AAA"), with such arbitration to be held in Atlanta, Georgia in
accordance with the AAA's Commercial Arbitration Rules then in effect. Each
party hereby irrevocably agrees that service of process, summons, notices or
other communications related to the arbitration procedure shall be deemed
served and accepted by the other party if given in accordance with Section
12.8. The arbitrators shall render a judgment of default against any party who
fails to appear in a properly noticed arbitration proceeding. The arbitration
shall be conducted by a panel of three arbitrators selected pursuant to AAA
Rules. Any award or decision rendered in such arbitration shall be final and
binding on both parties, and judgment may be entered thereon in any court of
competent jurisdiction if necessary.
(b) Notwithstanding subsection (a) above to the contrary,
any party may seek temporary or preliminary injunctive relief against the other
party at any court or proper jurisdiction with respect to any and all
preliminary injunctive or restraining procedures pertaining to this Agreement
or the breach thereof, pending the outcome of any arbitration proceeding.
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<PAGE> 34
IN WITNESS WHEREOF, the parties have executed this agreement under seal
as of the date first above written.
BUYER
FISHER BUSINESS SYSTEMS, INC.
By: /s/ Larry Fisher
------------------------------------
Title: President
---------------------------------
[CORPORATE SEAL]
SELLER
HALIS, L.L.C.
By: /s/ Paul W. Harrison
------------------------------------
Title: Managing Member
---------------------------------
PRINCIPALS
/s/ Paul W. Harrison (L.S.)
--------------------------------
Paul W. Harrison
/s/ James E. Askew (L.S.)
--------------------------------
James E. Askew
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<PAGE> 1
EXHIBIT 10.20
<PAGE> 2
FISHER BUSINESS SYSTEMS, INC.
1996 STOCK OPTION PLAN
1. PURPOSE
The purpose of Fisher Business Systems, Inc.'s 1996 Stock Option Plan
(the "Plan") is to encourage and enable eligible directors, officers and
employees of Fisher Business Systems, Inc. (the "Company") and its subsidiaries
to acquire proprietary interests in the Company through the ownership of Common
Stock of the Company. The Company believes that directors, officers and key
employees who participate in the Plan will have a closer identification with
the Company by virtue of their ability as shareholders to participate in the
Company's growth and earnings. The Plan also is designed to provide motivation
for participating directors, officers and key employees to remain in the employ
of and to give greater effort on behalf of the Company. It is the intention of
the Company to have the Plan qualify as an "incentive stock option plan" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder. Accordingly, the provisions of the Plan
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean a stock option agreement between the
Company and an Eligible Employee or an Eligible Participant pursuant to the
terms of this Plan.
(b) "Average Market Price" shall mean the mean between the high
"bid" and low "ask" prices as of the close of business for the Company's shares
of Common Stock in the over-the-counter market, as reported by The Nasdaq Stock
Market (or other national quotation service). If the Company's Common Stock is
not regularly traded in the over-the-counter market but is registered on a
national securities exchange, "Average Market Price" shall mean the closing
price of the Company's Common Stock on such national securities exchange.
(c) "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee of such Board.
(d) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan.
(e) "Common Stock" shall mean the $.01 par value Common Stock of the
Company.
(f) "Company" shall mean Fisher Business Systems, Inc., a Georgia
corporation.
(g) "Eligible Employee(s)" shall mean a person or persons regularly
employed by the Company or a Subsidiary.
(h) "Eligible Participant" shall mean an Eligible Employee or a
Non-Employee Director.
(i) "Non-Employee Director" shall mean a director of the Company who
is not a regular salaried employee of the Company or one of its subsidiaries.
(j) "Optionee" shall mean an Eligible Employee or Eligible
Participant having a right to purchase Common Stock under an Agreement.
(k) "Option(s)" shall mean the right or rights granted to Eligible
Employees or Eligible Participants to purchase Common Stock under the Plan.
<PAGE> 3
(l) "Plan" shall mean this Fisher Business Systems, Inc. 1996 Stock
Option Plan.
(m) "Shares," "Stock" or "Common Stock" shall mean shares of the
Common Stock.
(n) "Subsidiary" shall mean any corporation, if the Company owns or
controls, directly or indirectly, a majority of the voting stock of such
corporation.
(o) "Ten Percent Owner" shall mean an individual who, at the time an
Option is granted, owns directly or indirectly more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company.
3. EFFECTIVE DATE
The effective date of the Plan (the "Effective Date") shall be the date
the Plan is adopted by the Board of Directors or the date the Plan is approved
by the shareholders of the Company, whichever is earlier. The Plan must be
approved by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon, which shareholder vote must be taken within twelve
(12) months after the date the Plan is adopted by the Board of Directors. Such
shareholder vote shall not alter the Effective Date of the Plan. In the event
shareholder approval of the adoption of the Plan is not obtained within the
aforesaid twelve (12) month period, then any options granted in the intervening
period shall be void.
4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold to Eligible
Employees and Eligible Participants under the Plan may at the election of the
Board of Directors be either treasury shares or shares originally issued for
such purpose. The maximum number of shares which shall be reserved and made
available for sale under the Plan shall be 3,000,000. Any shares subject to an
Option which for any reason expires or is terminated unexercised may again be
subject to an Option under the Plan.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
or the Committee. The Committee shall be comprised of not less than two (2)
members appointed by the Board of Directors of the Company from among its
members. No member of the Board of Directors shall be appointed or serve as a
member of the Committee, and any such appointment or service immediately and
automatically shall terminate, in the event that such person is not a
disinterested person. As used herein, the term "disinterested person" means a
director who is not, during the one year prior to service as an administrator
of the Plan, or during such service, granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or any of its affiliates
(as such term is defined in the General Rules and Regulations of the Securities
Exchange Act of 1934, as amended).
Within the limitations described herein, the Board of Directors of the
Company or the Committee shall administer the Plan, select the Eligible
Employees and Eligible Participants to whom Options will be granted, determine
the number of shares to be optioned to each Eligible Employee and Eligible
Participant and interpret, construe and implement the provisions of the Plan.
Board of Directors and Committee members shall be reimbursed for out-of-pocket
expenses reasonably incurred in the administration of the Plan.
If the Plan is administered by the Board of Directors, a majority of the
members of the Board of Directors shall constitute a quorum, and the act of a
majority of the members of the Board of Directors present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
members of the Board of Directors shall be the acts of the Board of Directors.
If the Plan is administered by the Committee, the Committee shall select one of
its members as Chairman and shall hold its meetings at such times and places,
and pursuant to such rules consistent with the Plan, as it may determine. A
majority of the members of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the members of the
Committee shall be the acts of the Committee.
-2-
<PAGE> 4
6. ELIGIBILITY
Options granted pursuant to Section 8 shall be granted only to Eligible
Employees. Options granted pursuant to Section 9 shall be granted only to
Eligible Participants. Options granted pursuant to Section 10 shall be granted
only to Non-Employee Directors.
7. DURATION OF THE PLAN
The Plan shall remain in effect until all shares subject to or which may
become subject to the Plan shall have been purchased pursuant to Options
granted under the Plan; provided that Options under the Plan must be granted
within ten (10) years from the Effective Date.
8. QUALIFIED INCENTIVE OPTIONS
It is intended that Options granted under the Plan pursuant to this
Section 8 shall be qualified incentive stock options under the provisions of
Section 422 of the Code and the regulations thereunder or corresponding
provisions of subsequent revenue laws and regulations in effect at the time
such Options are granted. Such Options shall be evidenced by stock option
agreements in such form and not inconsistent with this Plan as the Board of
Directors or the Committee shall approve from time to time, which agreements
shall contain in substance the following terms and conditions:
(a) Price. The purchase price for shares purchased upon exercise
will be the Average Market Price on the day the Option is granted, as
determined by the Board of Directors or the Committee, or, if the Stock is not
traded in the organized markets, then the price shall be the fair market value
of the Stock as determined in good faith by the Board of Directors or the
Committee, but in no case less than the par value of such stock; provided
further that the purchase price of stock deliverable upon the exercise of a
qualified incentive option granted to a Ten Percent Owner shall be not less
than one hundred ten percent (110%) of the Average Market Price or fair market
value on the day the Option is granted, as determined by the Board of Directors
or the Committee, but in no case less than the par value of such stock.
(b) Number of Shares. The Agreement shall specify the number of
shares which the Optionee may purchase under such Option.
(c) Exercise of Options. The shares subject to the Option may be
purchased in whole or in part by the Optionee in accordance with the terms of
the Agreement, from time to time after shareholder approval of the Plan, but in
no event later than ten (10) years from the date of grant of the Option.
Notwithstanding the foregoing, shares subject to an Option granted to a Ten
Percent Owner shall be exercisable no later than five (5) years from the date
of grant of the Option.
(d) Medium and Time of Payment. Stock purchased pursuant to an
Agreement shall be paid for in full at the time of purchase. Payment of the
purchase price shall be in cash or shares of the Common Stock of the Company,
or a combination of cash and shares of the Common Stock of the Company. Upon
receipt of payment, the Company shall, without transfer or issue tax, deliver
to the Optionee (or other person entitled to exercise the Option) a certificate
or certificates for such shares.
(e) Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until the date of
issuance of the stock certificate to the Optionee for such shares. Except as
otherwise expressly provided in the Plan, no adjustments shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
(f) Nonassignability of Option. No Option shall be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by him or her.
-3-
<PAGE> 5
(g) Effect of Termination of Employment or Death. In the event that
an Optionee during his or her lifetime ceases to be an employee of the Company
or of any subsidiary of the Company for any reason (including retirement) other
than death or permanent and total disability, any Option or unexercised portion
thereof which was otherwise exercisable on the date of termination of
employment shall expire unless exercised within a period of three (3) months
from the date on which the Optionee ceased to be an employee, but in no event
after the term provided in the Optionee's Agreement. In the event that an
Optionee ceases to be an employee of the Company or of any subsidiary of the
Company for any reason (including retirement) prior to the time that an Option
is exercisable, his or her Option shall terminate and be null and void.
In the event that an Optionee during his or her lifetime ceases to be an
employee of the Company or any subsidiary of the Company by reason of death or
permanent and total disability, any Option or unexercised portion thereof which
was otherwise exercisable on the date such Optionee ceased employment shall
expire unless exercised within a period of one (1) year from the date on which
the Optionee ceased to be an employee, but in no event after the term provided
in the Optionee's Agreement. Permanent and total disability as used herein is
as defined in Section 22(e)(3) of the Code.
In the event of the death of an Optionee, the Option shall be
exercisable by his or her personal representatives, heirs or legatees, as
provided herein.
(h) Recapitalization. In the event that dividends are payable in
Common Stock of the Company or in the event there are splits, subdivisions or
combinations of shares of Common Stock of the Company, the number of Shares
available under the Plan shall be increased or decreased proportionately, as
the case may be, and the number of Shares deliverable upon the exercise
thereafter of any Option theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price.
(i) Reorganization. In case the Company is merged or consolidated
with another corporation and the Company is not the surviving corporation, or
in case the property or stock of the Company is acquired by another
corporation, or in case of a separation, reorganization, recapitalization or
liquidation of the Company, the Board of Directors of the Company, or the Board
of Directors of any corporation assuming the obligations of the Company
hereunder, shall either (i) make appropriate provision for the protection of
any outstanding Options by the substitution on an equitable basis of
appropriate stock of the Company, or of the merged, consolidated or otherwise
reorganized corporation which will be issuable in respect to the shares of
Common Stock of the Company, provided only that the excess of the aggregate
fair market value of the shares subject to option immediately after such
substitution over the purchase price thereof is not more than the excess of the
aggregate fair market value of the shares subject to option immediately before
such substitution over the purchase price thereof, or (ii) upon written notice
to the Optionee provide that the Option (including the shares not then
exercisable) must be exercised within sixty (60) days of the date of such
notice or it will be terminated.
(j) General Restriction. Each Option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the Shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such Option or the issue or purchase of Shares thereunder, such Option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors.
9. NON-QUALIFIED OPTIONS
The Committee may grant to Eligible Participants options under the Plan
which are not qualified incentive stock options under the provisions of Section
422 of the Code. Such non-qualified options shall be evidenced by Agreements in
such form and not inconsistent with this Plan as the Board of Directors or the
Committee shall approve from time to time, which Agreements shall contain in
substance the same terms and conditions as set forth in Section 8 hereof with
-4-
<PAGE> 6
respect to qualified incentive options; provided, however, that the limitations
set forth in Sections 8(a), 8(c) and 8(g) shall not be applicable to
non-qualified options.
10. NON-EMPLOYEE DIRECTOR PARTICIPATION
(a) On and as of the second Tuesday in June of each year during the
term of this Plan, each then Non-Employee Director of the Company shall be
granted, without the necessity of action by the Committee, an Option hereunder
to purchase 10,000 shares of Common Stock at the Average Market Price of such
Stock on the date of grant.
(b) Each new Non-Employee Director of the Company shall receive a
one-time grant, without necessity of action by the Board of Directors or the
Committee, as the case may be, of an option hereunder to purchase 10,000 Shares
on the date such Non-Employee Director first becomes a member of the Board of
Directors of the Company, at an exercise price equal to the Average Market
Price of such Stock on the date of grant.
(c) In the event the remaining number of shares of Stock reserved
for issuance under the Plan are insufficient to grant options for the
appropriate number of shares of Stock to Non-Employee Directors as of any grant
date, then no options shall be granted as of that grant date. Options granted
to Non-Employee Directors hereunder shall be evidenced by Agreements in such
form and not inconsistent with this Plan as the Board of Directors or the
Committee shall approve from time to time, which Agreements shall contain in
substance the same terms and conditions set forth in Section 8 hereof with
respect to qualified incentive options; provided, however, that the limitations
set forth in Sections 8(a) and 8(c) with respect to Ten Percent Owners shall
not be applicable to options granted to Non-Employee Directors pursuant to this
Section 10.
(d) Options granted pursuant to this Section 10 are intended to be
under a "formula plan" as recognized by Rule 16b-3(c)(2)(ii) promulgated under
the Securities Exchange Act of 1934, as amended, and shall be interpreted
accordingly.
(e) The provisions of this Section 10 shall not be amended more than
once every six months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder.
11. AMENDMENT OF THE PLAN
The Plan may at any time or from time to time be terminated, modified or
amended by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon by the Company's shareholders. The Board of
Directors may at any time and from time to time modify or amend the Plan in any
respect, except that without shareholder approval the Board of Directors may
not (1) increase the maximum number of shares for which Options may be granted
under the Plan either in the aggregate or to any Eligible Employee (other than
increases due to changes in capitalization as referred to in Section 8(h)
hereof), or (2) reduce the option price or waiting period (except as otherwise
expressly provided in the Plan in the case of a reorganization of the Company
as referred to in Section 8(i) hereof), or (3) extend the period during which
Options may be granted or exercised, or (4) change the class of employees
eligible for incentive stock options under Section 6 hereof, or (5) to
otherwise materially modify (within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934, as amended) the requirements as to eligibility for
participation in the Plan, or (6) to otherwise materially increase (within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended) the
benefits accruing to participants under the Plan. The termination or any
modification or amendment of the Plan shall not, without the written consent of
an Optionee, affect his or her rights under an Option or right previously
granted to him or her. With the written consent of the Optionee affected, the
Board of Directors or the Committee may amend outstanding option agreements in a
manner not inconsistent with the Plan. Without employee consent, the Board of
Directors may at any time and from time to time modify or amend outstanding
option agreements in such respects as it shall deem necessary in order that
Options granted hereunder shall comply with the appropriate provisions of the
Code and regulations thereunder which are in effect from time to time respecting
"Qualified Incentive Options."
-5-
<PAGE> 7
12. LIMITATION ON NUMBER OF SHARES THAT MAY BE PURCHASED
The aggregate fair market value (determined at the time the Option is
granted) of the shares with respect to which incentive stock options are
exercisable for the first time by an Optionee during any calendar year (under
all incentive stock option plans of the Company) shall not exceed $100,000.
13. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company, all Eligible Employees and Eligible
Participants participating in the Plan, and on all persons eligible or who
become eligible to participate in the Plan.
-6-
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Fisher Business Systems, Inc.
Atlanta, Georgia
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of the previously filed Registration Statement No. 33-22588
on Form S-8 dated June 16, 1988, No. 33-22591 on Form S-8 dated June 16, 1988,
No. 33-38257 on Form S-8 dated December 19, 1990, No. 33-38258 on Form S-8
dated December 19, 1990, No. 33-53702 on Form S-8 dated October 20, 1992 and
No. 33-53704 on Form S-8 dated October 20, 1992 of our report dated February
22, 1996, except for Note 9 which is dated as of March 29, 1996, relating to
the financial statements of Fisher Business Systems, Inc. appearing in the
Company's Annual Report on Form 10-KSB for the year ended January 31, 1996.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
Atlanta, Georgia
April 29, 1996
<PAGE> 1
EXHIBIT 24.1
<PAGE> 2
STATE OF FLORIDA
COUNTY OF SARASOTA
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Jeffrey C. Brenner, a Director
of FISHER BUSINESS SYSTEMS, INC., a Georgia corporation, do constitute and
appoint Larry Fisher and James W. Dixon my true and lawful attorneys-in-fact,
each with full power of substitution, for me in any and all capacities, to
sign, pursuant to the requirements of the Securities Exchange Act of 1934, the
Annual Report on Form 10-KSB for FISHER BUSINESS SYSTEMS, INC., for the fiscal
year ended January 31, 1996, and to file the same with the Securities and
Exchange Commission, together with all exhibits thereto and other documents in
connection therewith, and to sign on my behalf and in my stead, in any and all
capacities, any amendments to said Annual Report, incorporating such changes as
said attorneys-in-fact deem appropriate, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 29th day
of April, 1996.
/s/ Jeffrey C. Brenner
-------------------------------------------
Jeffrey C. Brenner
ACKNOWLEDGEMENT
BEFORE me this 29th day of April, 1996, came Jeffrey C. Brenner,
personally known to me, who in my presence did sign and seal the above and
foregoing Power of Attorney and acknowledged the same as his true act and deed.
/s/ Todd Bowden
-----------------------------------------
NOTARY PUBLIC
State of Florida
My Commission Expires: September 13, 1999
<PAGE> 3
STATE OF GEORGIA
COUNTY OF FULTON
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, James W. Dixon, a Director of
FISHER BUSINESS SYSTEMS, INC., a Georgia corporation, do constitute and appoint
Larry Fisher my true and lawful attorney-in-fact, with full power of
substitution, for me in any and all capacities, to sign, pursuant to the
requirements of the Securities Exchange Act of 1934, the Annual Report on Form
10-KSB for FISHER BUSINESS SYSTEMS, INC., for the fiscal year ended January 31,
1996, and to file the same with the Securities and Exchange Commission,
together with all exhibits thereto and other documents in connection therewith,
and to sign on my behalf and in my stead, in any and all capacities, any
amendments to said Annual Report, incorporating such changes as said
attorney-in-fact deems appropriate, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 24th day
of April, 1996.
/s/ James W. Dixon
-----------------------------------
James W. Dixon
ACKNOWLEDGEMENT
BEFORE me this 24th day of April, 1996, came James W. Dixon,
personally known to me, who in my presence did sign and seal the above and
foregoing Power of Attorney and acknowledged the same as his true act and deed.
/s/ Nancye Lee
-----------------------------------
NOTARY PUBLIC
State of Georgia
My Commission Expires: July 6, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JANUARY 31,
1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED JANUARY 31, 1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> JAN-31-1996
<EXCHANGE-RATE> 1
<CASH> 177,649
<SECURITIES> 0
<RECEIVABLES> 6,028
<ALLOWANCES> 3,000
<INVENTORY> 0
<CURRENT-ASSETS> 188,931
<PP&E> 208,480
<DEPRECIATION> 197,048
<TOTAL-ASSETS> 287,534
<CURRENT-LIABILITIES> 588,423
<BONDS> 0
0
150,000
<COMMON> 48,695
<OTHER-SE> (499,584)
<TOTAL-LIABILITY-AND-EQUITY> 287,534
<SALES> 732,549
<TOTAL-REVENUES> 732,549
<CGS> 246,992
<TOTAL-COSTS> 246,992
<OTHER-EXPENSES> 681,981
<LOSS-PROVISION> 3,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (199,424)
<INCOME-TAX> 0
<INCOME-CONTINUING> (199,424)
<DISCONTINUED> 0
<EXTRAORDINARY> 243,838
<CHANGES> 0
<NET-INCOME> 44,414
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
